Legal Definitions - réméré

Réméré refers to a contractual right that allows a seller to buy back an asset they have previously sold, typically within a specified timeframe and under pre-agreed conditions. It essentially grants the original seller an option to reverse the sale.

• Example 1: Real Estate Transaction

  A homeowner, facing temporary financial hardship, sells their house to an investor. However, the sales contract includes a réméré clause. This clause stipulates that the original homeowner has the right to repurchase the property within two years at a predetermined price, provided they meet all the specified conditions, such as making regular payments to the investor during that period. This arrangement allows the homeowner to access immediate funds while retaining the possibility of regaining ownership of their home once their financial situation improves.

  This example illustrates réméré because the original seller (the homeowner) retains a contractual option to buy back the asset (the house) from the buyer within a defined period and under specific terms.

• Example 2: Business Asset Sale

  A small manufacturing company sells a specialized piece of machinery to a larger competitor to raise capital for a new product line. As part of the agreement, they negotiate a réméré clause. This clause grants the small company the option to repurchase the machinery within four years if their new product line proves successful and they require the equipment for increased production. The repurchase price and conditions are clearly outlined in the initial sales contract.

  Here, the réméré clause provides the selling company with the right to repurchase a specific business asset (the machinery) from the buyer at a later date, demonstrating the concept of a seller retaining a buy-back option.