Sales contract terms

Sales contract terms

Contents

Important sales terms

There are some terms that you should make sure are included in any sales contract, regardless of the circumstances. You should always bear in mind that the agreement can record any specific promises between the buyer and seller (or even other people, referred to as 'third parties'). This is so you can tailor your contract of sale to suit your own circumstances. For example, you may have agreed with the seller on specific materials to be used for building works.

There are numerous provisions that apply automatically, but which we don't consider here. These types of contractual terms depend to a large extent on what is being sold. For more information on terms that apply automatically, see Problems with goods and Problems with services.

Price and payment

Price and payment are what a sales contract boils down to, and delivery is the practical implication of agreeing on price and payment. In other words, in very general terms, the thing sold will need to be delivered once a price has been agreed and then paid.

The agreement should set out the price of the goods or services and make a formal acknowledgement that either the full price has been paid for the item or service, or a deposit has been paid and the amount outstanding is still payable.

Delivery

This is the legal term for what happens to the item being sold once it stops being owned by the seller and is transferred to you (or other person if that's what's envisaged in the agreement). You and the seller are free to decide between you on when delivery happens. Normally, delivery is considered to be the moment when the item being sold is handed over if it's a physical object.

For example, in relation to goods, usually you'll take the goods away with you as soon as they're bought. If you don't take the goods away, the agreement could record the current location. This is so that you can make arrangements to insure the goods until they're delivered because ownership and the risk of damage to the goods will pass to you once bought. So, if you buy a large piece of antique furniture and it's damaged or destroyed before you've received it, you'll still own that (now damaged) piece of antique furniture.

The agreement should also record when and how delivery is to take place if you don't take the goods away immediately. There could also be terms that allow for the price to include costs for delivery by the seller or that delivery is an additional cost not included in the price.

In relation to services, the agreement should record as exactly as possible what service is to be provided, how it's to be provided, by whom and within what timescale.