Free Sale of Goods Agreement Template
Selling goods involves more than receiving payment and delivering items to the buyer. You must properly document the transfer of ownership, especially for valuable items. Completing every necessary contract protects businesses and individuals in case of future disputes between them or misunderstandings with authorities regarding taxes.
One such contract is the sale of goods agreement. This document outlines the price, payment mode, shipping details, dispute resolution, title warranty, and sale date, among other matters surrounding the transaction.
To prepare your Sale of Goods Agreement, you must understand the specific laws where you live. For example, the Uniform Commercial Code[1] defines goods as “movable at the time of identification to the contract.” So, a general sales of goods agreement would not work for real estate, software, and stocks. However, you can use it to sell livestock, furniture, cars, and other manufactured items.
Read on to learn about the mandatory components of a sale of goods agreement and how to write one.
Preparing to Write Your Sale of Goods Agreement
An efficient, legally binding contract must follow the correct legal format. It must also contain both parties’ names—in this case, the seller and the buyer—and use language that makes it admissible in court.
A quick, customizable template will work when making a one-time sale of personal property. However, if you are selling a valuable property or running a business that regularly sells goods, a ready-made template should be adapted to ensure it’s legally binding and protects your interests.
As you prepare, keep the following requirements in mind.
- Names of both parties: Ensure you have the full legal names of both parties. If the buyer is an individual, you need their name; if they are a business, you should obtain the company’s registered name. An error can make the contract null and void.
- Description of the item for sale: Prepare a clear description of the goods you sell. For example, you can write down the make, model, color, and vehicle identification number if it’s a car.
- Legal advice: You may need to speak to a lawyer during the preparation stages to ensure your final document is legally sound and you know the governing laws. Also, an attorney can advise if you need additional clauses for specific sales. In most US states, article 2 of the Uniform Commercial Code governs the sale of goods. An attorney can help you understand the law where you live.
- The type of goods: The items you are selling can be existing goods, meaning they must be available at the time of sale; future goods, meaning they haven’t been produced yet; or contingent, which means the completion of the sale depends on some condition.
Gathering all information beforehand makes creating the document straightforward and quick.
How to Write a Sale of Goods Agreement
Transferring ownership of goods is a delicate process that can lead to losses if not correctly handled. Therefore, although a sale of goods contract is a short document, you need to take your time to draft it. Ensure you limit your liabilities to what is fair and protect your property until the sale is complete and you have received total compensation.
Make sure your document contains the following information and clauses.
- The document title should identify it as a sale of goods agreement.
- Name the parties (the buyer and seller) and include their contact information and addresses.
- Write the date when the agreement is made.
- Describe the goods. This portion of the document describes the item you are selling. It should be clear enough to avoid assumptions about what is included in the transaction.
- State the price you and the buyer have agreed upon. Clarify whether your stated cost includes additional expenses, such as sales taxes.
- Payment is a significant part of the buying process. Take the time to clarify how and when payment will be made—whether upon delivery or if there is a down payment before the release of goods. Also, determine the mode of payment.
- Agree with the buyer about the delivery location and who covers the cost. Also, discuss the consequences of delays.
- Explain what happens if goods are damaged or lost during shipping or after delivery. The agreement should clearly explain who is liable for the losses.
- Can the buyer inspect the goods before the sale is finalized? If the goods are being sold “as is,” then the seller disclaims any implied warranties, and the buyer should get an opportunity to view and inspect or arrange for inspection before agreeing to the contract.
- The buyer is usually responsible for subsequent taxes after the sale. You should state the date or outline conditions that transfer tax responsibilities to the buyer.
- State at what point the property title changes hands. Some sellers hand over the title when the goods are delivered, and others do so after giving the buyer a bill of sale.
- List conditions under which the seller or buyer can cancel the agreement.
- The agreement becomes binding after both parties sign it.
You may add as many provisions as you need to address additional matters that apply to the specific transaction. For example, a sale of goods agreement for a vehicle may require you to address the warranty of title.
Article written by
Senior Writer | Experienced Paralegal | 79 Articles
Dena Standley is an experienced paralegal based in Houston, Texas and has over a decade of experience working as a paralegal with trial lawyers and law firms. She is passionate about making legal processes more accessible and helping people understand and navigate complex legal matters with confidence.
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