Sale of Goods Agreement

What is a sale of goods agreement?

A sale of goods agreement, also sometimes called a sales agreement or sales contract, is a document that a buyer and seller can use to outline the terms of purchase of certain goods. A sale of goods agreement can cover the sale of any type of good and any type of sale, whether it's a one-time sale or multiple shipments over time.

What are the different types of sale of goods documents?

There are many types of specific sale of goods documents. Though this document is general purpose and can be used to sell any tangible and movable items from one party to another, parties may instead choose to use a document more specifically tailored to their purposes. For example, a vehicle sale agreement may be used to sell a car, boat, or other type of vehicle.

What is the difference between a sale of goods agreement and a property sale agreement?

Though both documents are used to memorialize an agreement between a buyer and a seller, they are used to sell different types of things. A sale of goods is used to sell tangible and movable items from one party to another. Some examples of goods are furniture, cars, collectibles, raw materials, or agricultural products. A property sale agreement is used for the sale of what is known as real property. Real property is land and anything attached to that land. Examples of real property would be a farm, house, or vacant lot.

Is it mandatory to use a sale of goods agreement?

No, it is not mandatory to use a sale of goods agreement. A buyer and seller could orally agree to terms for a more informal sale. However, a sale of goods agreement is highly advisable to protect both the buyer and seller, especially in situations involving large purchases or many separate purchases over time. Using a written sale of goods agreement ensures that both parties understand the terms of the agreement and helps avoid misunderstands and disputes.

What is a "deposit"?

A deposit is a partial payment made by the buyer to the seller before the purchase is complete. By using a deposit, a buyer can demonstrate that they are serious about the sale and intend to complete the purchase. This deposit can either be refunded to the buyer once the purchase is completed or applied to the final purchase price.

Who may enter into a sale of goods agreement?

Both individuals and businesses may enter into sale of goods agreements. For individuals entering into sale of goods agreements, they must be of legal age to enter into a contract, 18 years of age or older in most states. They must also be mentally competent to enter into a contract. Business entities entering into a sale of goods agreement must have the legal authority to do so, usually outlined in the business' governing documents, such as bylaws or operating agreement.

What must a sale of goods agreement include?

A valid sale of goods agreement must contain at least the following mandatory clauses:

• Contact information: The sale of goods agreement should include the name, address, and contact information for all the involved parties, including the buyer and the seller.
• Description of goods: The sale of goods agreement includes a detailed description of the goods that are being purchased by the buyer. The agreement also specifies whether this will be one sale or multiple sales over time.
• Price of goods: The sale of goods agreement outlines the total purchase price of the goods. If the agreement includes multiple sales, it also describes whether there will be one overall price paid for multiple sales or a different price for each sale.
• Payment: The sale of goods agreement includes when and how the buyer is expected to pay the seller for the goods.
• Delivery: The sale of goods agreement specifies details about how the delivery of the goods will take place. If applicable, the agreement includes the date the delivery is expected to happen and where the delivery will take place.

In addition to the above mandatory information, the following information may also be included:

• Deposit: The sale of goods agreement has the option of requiring that the buyer pay a deposit before they make a final payment of the rest of the purchase price. This deposit may either be refunded or applied to the final purchase price.
  
  

What should be done once the sale of goods agreement is written?

Once this document has been completed and reviewed, it should be printed out and signed by both the buyer and the seller. The parties should each save a copy of the sale of goods agreement in their files for future reference and in case of dispute or disagreement.

Can the parties cancel a sale of goods agreement?

Under certain circumstances, it is possible to cancel a sale of goods agreement. Through mutual agreement, both parties may agree to cancel the contract. A party is able to unilaterally cancel the contract if the other party does not abide by its terms and effectively breaches the contract. For example, if the buyer does not pay the seller the agreed upon price by the date laid out in the contract, the seller is free to cancel the contract and not deliver the goods that were to be sold. If the seller does not deliver the goods on time or delivers them in a damaged condition, the buyer may cancel the contract and refuse payment.

Which laws are applicable to sales of goods agreements?

Sales of goods agreements are governed by both state and federal laws. The Uniform Commercial Code (UCC) is a list of laws that control the sale of goods and has been adopted by all 50 states individually. In addition to the UCC, most states have their own state commercial codes that concern the sale of goods.

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