WHAT IS A SALE OF GOODS AGREEMENT? 

A Sale of Goods Agreement is a contract that allows the buyer and seller to stipulate to the terms and manner in which goods will transfer from seller to buyer. The terms and conditions of a sale of goods contract can be classified as implied or expressed and sale of goods contracts usually also include warranties.

WHEN DO YOU NEED A SALE OF GOODS AGREEMENT?

You need a Sale of Goods Agreement when you want to form a contract for the purchase of actual tangible goods or for services. A sale of goods agreement is a good start when you are supplying goods or services or when you simply wish to create a formal arrangement. Sale of goods can cover physical goods and services as well as a combination of both.

• Physical Goods: these are generally physical items such as parts, components, furniture, equipment, livestock etc.

• Services: these represent the undertaking of duties in exchange for compensation such as consultancy, legal, accounting etc.

• Goods and Services: commonly goods and services can be purchased jointly. For example, you may purchase and computer which includes the installation of the computer.

WHAT IS INCLUDED IN A SALE OF GOODS AGREEMENT?

A Sale of Goods Agreement should include the following:

• The names and contact information of the parties.

• A detailed description of the goods and or services that will be the subject matter of the agreement and the price and tax/duties which may apply.

• The date and time of transfer and delivery of the goods and or services.

• A statement granting the buyer the right of inspection if applicable.

• A statement as to the risk of loss will be assigned to in the event that a loss should arise.

• A statement of all warranties (implied or expressed) or lack thereof.

• Explanation of the buyer’s obligation to pay and the manner in which payment should be made (deposits, dates etc).

• Statements as to notice and delivery of goods and services.

• A statement as to waiver of rights by either party if applicable.

• A statement of a merger clause.

• A severability clause.

• An explanation as to what constitutes a breach of the agreement and what is a minor or major breach.

• Remedies for breach as well as information as to where a claim can be brought if the agreement is not honoured by either party.