Transaction: legal definition and example

Definition

A transaction is an agreement between two parties to settle a dispute or claim, usually in exchange for payment or some other form of compensation.

Example

Of course, here’s a concrete example to illustrate what a transaction is in the legal field. Let’s imagine you’ve bought a used car from a private individual, and a few weeks later you discover a major defect that wasn’t mentioned at the time of sale. You contact the seller to express your dissatisfaction and ask for financial compensation to cover the cost of repairs. After some negotiation, you reach an agreement with the seller: he agrees to reimburse you part of the purchase price of the car in exchange for your waiver of any legal action. This agreement is called a “transaction”, because it settles a dispute between two parties without going to court.

Citation and reference

Here are a few quotes from Canadian law on the legal term “transaction”:

– According to article 2041 of the Civil Code of Quebec: “A transaction is a contract by which the parties terminate a dispute that has arisen or prevent a dispute from arising.”

– Article 2635 of the Civil Code of Quebec specifies that: “A transaction must be made in consideration of a specific object, and be consented to freely and with full knowledge of the facts.”

– Section 14 of the Quebec Courts of Justice Act states that: “The courts of justice have jurisdiction to hear applications for homologation of transactions.”

– Article 2638 of the Civil Code of Quebec stipulates that: “A transaction has, between the parties, the authority of res judicata in the final instance.”

– Article 2639 of the Civil Code of Quebec specifies that: “The transaction may be challenged for error, fraud, violence or lesion.”

– Article 768 of the Code of Civil Procedure of Quebec states that: “The transaction may be produced in evidence to prove the existence of an agreement between the parties.”