03 Nov Sales and purchase agreements under Cypriot law
A Sales and Purchase Agreement (SPA) is one of the most common and essential contracts under Cypriot law. It governs the terms under which ownership of property, shares, goods, or other assets is transferred between a seller and a buyer. Our law office provides expert advice and drafting services for all types of SPAs, ensuring full compliance with Cypriot legislation and protection of our clients’ interests.
Legal framework
Sales and Purchase Agreements in Cyprus are primarily governed by:
- The Contract Law, Cap. 149, which sets out the general principles of contract formation, performance, and breach.
- The Sale of Goods Law, Cap. 267, which regulates the sale and purchase of movable goods and reflects many principles of English common law.
- The Immovable Property (Tenure, Registration and Valuation) Law, Cap. 224, and the Sale of Land (Specific Performance) Law, Cap. 232, which govern the sale and transfer of real estate in Cyprus.
- The Companies Law, Cap. 113, for the sale and transfer of shares and business assets.
These laws together create a robust and reliable framework for the execution and enforcement of SPAs in Cyprus.
Essential Features of an SPA
A valid SPA under Cypriot law requires:
- Offer and Acceptance – a clear and mutual agreement between the parties.
- Consideration – usually a monetary price or other value exchanged.
- Intention to Create Legal Relations – both parties must intend to be legally bound.
- Capacity and Consent – the parties must have legal capacity and must act without coercion, mistake, or misrepresentation.
Our office ensures that all statutory and common law requirements are satisfied, so that the agreement is enforceable and reflects the client’s commercial objectives.
Key terms typically included
An expertly drafted SPA will usually cover:
- Identification of the parties and background of the transaction.
- Detailed description of the asset, property, or shares being sold.
- Purchase price, payment terms, and completion conditions.
- Representations, warranties, and undertakings protecting both sides.
- Completion and transfer procedures.
- Default, termination, and remedies clauses.
- Governing law and jurisdiction (commonly Cyprus).
Each clause must be tailored to the specific nature of the transaction, whether it involves land, shares, or movable property.
Real estate transactions
In real estate sales, Cypriot law requires the SPA to be in writing and signed by both parties. The agreement should be deposited with the District Land Registry Office to secure the buyer’s rights under the Sale of Land (Specific Performance) Law, Cap. 232. This ensures that the seller cannot dispose of the property to another party before the transfer is completed.
Stamp duty is payable before registration, based on the purchase price, subject to a statutory cap.
Share sale agreements
For corporate transactions, our law office prepares detailed Share Purchase Agreements governed by the Companies Law, Cap. 113. These agreements typically include extensive warranties and indemnities relating to the company’s financial status, liabilities, and regulatory compliance.
We also handle all post-completion formalities, including board resolutions, share transfer forms, and updating the company’s register of members.
Remedies and enforcement
In case of breach, Cypriot law provides the injured party with several remedies, including:
- Damages for financial loss.
- Specific performance, particularly for immovable property transactions.
- Rescission or termination of the contract.
- Injunctions and declaratory relief from the Cypriot courts.
Our office represents clients in both transactional and contentious matters, ensuring that their rights are fully protected at every stage.
