What is a Basic Sale of Goods Contract?
A Basic Sale of Goods Contract is a document used for sales transactions between a seller and a buyer of a specific item. It sets out the purchase price, condition at the time of sale, and the delivery process.
A Sale of Goods Contract, also called a “Purchase Contract” or a “Sales Agreement,” sets out the terms of a sale transaction between two parties. Usually, a Sale of Goods Contract Template contains at least the following terms:
- The buyer
- The seller
- The definition of the goods or services to be sold
- Any other terms that can help define the terms of the contract
A sales agreement should be utilized to ensure that the transaction runs smoothly for all parties, whether it’s a small-scale or a large-scale transaction. In the United States, if the sale of products is for more than $500, a purchase contract must be written in order for it to be enforceable under the Uniform Commercial Code. Though the UCC isn’t federal law, it serves as a model that every state has adopted and implemented in some manner.
Here are six points to remember when drafting a Basic Sale of Goods Contract:
- Identify the parties. Make sure the contract for goods and services clearly identifies the buyer and seller. Verify that all of the identifying details are authentic. If necessary, make sure it names any parent, affiliate, or partner of a buyer or seller who may be held liable for a party’s debts in the future.
- Identify the services or goods the contract covers. The most significant component of a sale of goods contract is determining what the agreement covers. This is where both parties need to be as picky with their language as possible. Any of the following can be used to define goods:
- Lot or Stock Keeping Unit (SKU) number
- Size and weight
- Other identifying details like defects, blemishes, or markings.
When selling services, the process differs slightly. The services to be done are frequently described in a Statement of Work (SOW). SOWs are typically attached to contracts and normally include a lot of information on the services that the parties promise to provide.
- Confirm the details of payment. The goal of a sale of goods contract is to specify payment terms. Whether you’re the buyer or the seller, you’ll want to negotiate the terms to your satisfaction. In most cases, the agreed-upon price is included in the written contract. It covers details including payment modes or whether the sale will be paid in installments or all at once. In most sales contracts, there are also conditions that describe what happens if there is a default (if the buyer fails to pay).
- Confirm the details of delivery of services or goods. A sales contract’s delivery specifics are an important aspect of the written document. It’s critical to know when and how to deliver, whether you’re providing a yacht or accounting services under your contract.
In certain contracts, generally for customized products like specialty goods or software, the sale of goods contract may include an inspection period. Usually, the buyer takes this time to ensure that the product is fit for use before paying in full. If your contract contains a clause like this, you should consult an experienced business lawyer before finalizing the agreement.
- Negotiate the appropriate representations and warranties. Contract warranties are assurances from the seller that the item being sold will meet specific requirements. Contracts typically include express warranties regarding the reliability of the products being sold. However, keep an eye out for possible warranty waivers. Make sure you get the right protection for yourself and any goods you’re purchasing. Also, be wary of anyone who tries to sell you something “as is.”
- Negotiate situation-specific contract provisions. Most contracts only have a few situation-specific elements, such as “choice of law” and “confidentiality,” that must be addressed prior to signing. A contract for the sale of goods is similar to any other transaction. Here are a few things to think about as you finish drafting your contract:
- Choice of governing law
- Level and duration of confidentiality provisions
- Consequences for breach of various contract provisions
- Notices under the contract
While these last few provisions may not appear to be significant, they frequently are. A choice of law provision can sometimes determine whether or not a contested contract is enforced. Moreover, providing accurate notice information will save you the frustration of being unable to claim your rights under a breached agreement.
How to fill out a Basic Sale of Goods Contract?
Using PDFRun, you can electronically fill out and download a PDF copy of the Sale of Goods Contract PDF in minutes. Fill it out by following the instructions below.
Enter the date the agreement was made, following the format: Month, Day, Year.
Enter the buyer’s full name.
Enter the seller’s full name.
This section states that the seller desires to sell a certain tangible personal property to the buyer, and the buyer desires to purchase it from the seller.
Therefore, In Consideration…
This section states that the parties agree to follow the mutual promises contained in this agreement.
This section states that the seller agrees to sell, transfer, and convey to the buyer, and the buyer agrees to purchase the following tangible personal property: Enter the name of the goods.
This section states that the buyer shall pay the seller for the goods. Enter the amount in dollars.
This section states that the buyer shall purchase goods free on board (FOB) the seller’s location and be responsible for all expenses associated with shipping.
A shipment designated as FOB (the seller’s location) means as soon as the shipment of goods leaves the seller’s warehouse, the seller records the sale as complete.
Right of Inspection
This section states that the buyer shall have the right to inspect the goods on arrival at the buyer’s facility.
Identification of Goods
This section states that the identification of goods must be made here or in an attachment.
Transfer of Title
This section states that the transfer of title and full ownership rights of the goods shall not be passed to the buyer until the buyer has paid in full the purchase price to the seller.
Affix the buyer’s signature.
By signing, the buyer agrees to all the terms stated in this agreement.
Enter the date the buyer signed the form.
Affix the seller’s signature.
By signing, the seller agrees to all the terms stated in this agreement.
Enter the date the seller signed the form.