Sale of Goods Agreement

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What is it?

A Sale of Goods Agreement is a legal contract for the sale and purchase of goods (that’s to say physical items, as opposed to services you might render).

You can ensure that your relationship with a purchaser or seller is formalised in a legally binding contract by using a Sale of Goods Agreement. This means you can set out the exact nature of the goods, as well as price and payment terms and what will happen at the end of the contract.

Why do you need it?

Before a product reaches its final destination, it may pass through the hands of international manufacturers and distributors. It is therefore very important to make sure the buyer's and seller's responsibilities are established at the beginning of the business relationship.

A Sale of Goods Agreement establishes the terms on which a seller will sell and transfer goods to a buyer. The agreement must be clearly written to ensure careful consideration of the sale and delivery risks. Indeed, a well-drafted Sale of Goods Agreement can lay the foundation for a cost-effective relationship between seller and buyer.

Key clauses to watch for:

When drafting a Sale of Goods Agreement, it is important to focus on a number of key clauses, in particular:

  • Details of the buyer and seller;
  • Description of the goods and relevant taxes/duties;
  • Deadline for payments;
  • Notification of defective goods; and
  • Situations in which either party may wish to terminate the arrangement early (with consideration given for what may constitute minor and major breaches of contract).

Sale of Goods Agreement Document