Contractbook dictionary

Sales

Here you will find a general and short introduction into the laws and rules for sales including a short guide to sales agreements.

Here you will find a general and short introduction into the laws and rules for sales including a short guide to sales agreements.

A sale is the transfer of a ware or service in exchange for payment or some other form of compensation. It sounds very simple and it often is. However, there are a number of legal elements you should pay attention to when conducting a sale and potentially drafting a purchase and sales agreement.


Purchase and sales agreements

A sale can be legal and binding without a written purchase and sales agreement. Documenting a sale with a gentlemen’s agreement can be difficult, however, and it weakens one’s legal position should it come to a dispute. You could potentially form a framework agreement to determine the conditions for later singular agreements. This way you can avoid constant negotiations with the same party.


Hence, it is a good idea to draft a good purchase and sales agreement. We recommend including the following in such a contract:


-    Description of the ware’s nature, prize and delivery agreement. This serves to prevent legal shortcomings.


-    Responsibility and risk of loss: Here you would typically specify who is risking loss if the ware is damaged or misplaced, for example.


-    Guarantee: As vendor you can decide to grant additional guarantee like a prolonged reclamation period with certain conditions attached to it.


-    Jurisdiction: This describes how a potential dispute is to be settled.


-    Force majeure: The vendor will often include a force majeure clause to withdraw themselves from responsibility in the event of special circumstances that can not be avoided or controlled. These could be strikes, war or natural disasters.


Sales and the law

There are multiple laws regulating the rules for purchases and sales. Agreement laws contain general descriptions for when agreements are valid - including when an offer is legally binding. Fundamentally, an agreement is legally binding when it is formed. However, there are cases where right of cancellation applies or where the sale goes against decency. (Hence, it is not possible to sell your firstborn son as a slave for example). A sale can also be invalid if the buyer or vendor were forced or threatened to participate in the trade. Laws on agreements furthermore include rules for power of attorney.


In addition, sales laws contain a number of rules regarding purchases and sales. Among other things you will find provisions for compensation, reclamation, invoices, consumer rights, payment times including legal conditions in the event of deficient wares. Finally, there are more rules for purchases and sales included in consumer agreement laws and laws regarding e-commerce which require web shops to have accessible terms and conditions on their homepages.

Effective contract management for modern businesses

Create, sign and store your contracts securely and digitally, in one place.

Request demo

Free ebooks library

Learn more about law, digitization and modern technologies, among other things.

Visit library
Disclaimer: This overview is for informational purposes only and cannot be counted as legal advice.