Contract of sale

In contract law, a contract of sale, sales contract, sales order, or contract for sale^[1] is a legal contract for the purchase of assets (goods or property) by a buyer (or purchaser) from a seller (or vendor) for an agreed upon value in money (or money equivalent).

An obvious ancient practice of exchange, in many common law jurisdictions it is now governed by statutory law. See commercial law.

Contracts of sale involving goods are governed by Article 2 of the Uniform Commercial Code in most jurisdictions in the United States.^[2] In Quebec, such contracts are governed by the Civil Code of Quebec as a nominate contract in the book on the law of obligations. In some Muslim countries it is governed by sharia (Islamic law); however, many Muslim countries apply other law to contacts (e.g. the Egyptian Civil Code, based on the Napoleonic Code, which beyond its application in Egypt serves as the model for the civil codes of several other Arab states).

A contract of sale lays out the terms of a transaction of goods or services, identifying the goods sold, listing delivery instructions, inspection period, any warranties and details of payment.

Formation and stages

According to the Civil Code of the Philippines Article 1458, the contract of sale has three stages: negotiation, perfection, and consummation.^[3]

Negotiation begins when prospective contracting parties indicate interest in the contract, ending with its finalization.^[3]
Perfection begins upon the concurrence of the elements of sale. These elements include the meeting of the minds, determinate subject matter or object, and the price certain in money or its equivalent.^[3]
Consummation happens when the parties perform their respective undertaking, resulting to the extinguishment of the contract.^[3]

In the United States, according to the Uniform Commercial Code Article 2, the contract of sale can be formed in different ways: (1) offer and acceptance, where a sale begins with an offer and acceptance; (2) firm offers, where a merchant's written offer remains open for a specified time; and (3) battle of the forms, where conflicting terms in exchanged forms are resolved by the UCC.^[2]

References

^ Google Ngram Viewer
^ ^a ^b Sousa, Julia (2024-10-17). "Uniform Commercial Code ("UCC") Article 2 | DarrowEverett". Darrow Everett LLP. Retrieved 2025-02-09.
^ ^a ^b ^c ^d Domingo, Andrix D. (2021). Regulatory Framework and Legal Issues in Business Part I. Ampucao, Itogon, Benguet: Coaching for Results Publishing. p. 1. ISBN 978-621-8205-03-1.

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[1] Google Ngram Viewer

[:0-2] Sousa, Julia (2024-10-17). "Uniform Commercial Code ("UCC") Article 2 | DarrowEverett". Darrow Everett LLP. Retrieved 2025-02-09.

[:1-3] Domingo, Andrix D. (2021). Regulatory Framework and Legal Issues in Business Part I. Ampucao, Itogon, Benguet: Coaching for Results Publishing. p. 1. ISBN 978-621-8205-03-1.

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Contract law

Formation
Capacity Offer and acceptance Meeting of the minds² Abstraction principle^4,5 Posting rule¹ Mirror image rule Invitation to treat Firm offer Consideration^1,4 Implication-in-fact Collateral contract
Defences
Misrepresentation Mistake Threats and unequal bargaining power Illegality and public policy Unconscionability Culpa in contrahendo² Force majeure Frustration of purpose Impossibility Impracticability Hardship Set-off Illusory promise¹ Statute of frauds¹ Non est factum¹ Unclean hands¹ Accord and satisfaction¹ Exculpatory clause
Interpretation
Parol evidence³ Contract of adhesion Integration clause Contra proferentem UNIDROIT Principles
Dispute resolution
Choice of law clause Forum selection clause Hague Choice of Court Convention Arbitration New York Convention UNCITRAL Model Law Mediation Singapore Mediation Convention Enforcement of foreign judgments Hague Judgments Convention
Rights of third parties
Privity of contract¹ Assignment Delegation Novation Third-party beneficiary
Breach of contract
Anticipatory repudiation Cover Exclusion clause Efficient breach Deviation Fundamental breach
Remedies
Specific performance³ Money damages Liquidated, stipulated, or penal damages³ Rescission
Quasi-contractual obligations
Promissory estoppel¹ Quantum meruit¹ Unjust enrichment Restitution Negotiorum gestio²
Duties of parties
Duty of honest contractual performance (or doctrine of abuse of rights)⁶ Duty of good faith (also implied covenant of good faith and fair dealing or duty to negotiate in good faith)⁷ Contract A and Contract B in Canadian contract law⁶
Related areas of law
Conflict of laws Commercial law
By jurisdiction
Australia Canada China (mainland) Ireland India Saudi Arabia United Kingdom England and Wales Scotland United States
Other law areas
Tort law Property law Wills, trusts, and estates Criminal law Evidence
Notes
1 Specific to common law jurisdictions 2 Specific to civil and mixed law jurisdictions 3 Historically restricted in common law jurisdictions but generally accepted elsewhere; availability varies between contemporary common law jurisdictions 4 Specific to the German Bürgerliches Gesetzbuch and other civil codes based on the pandectist tradition 5 Explicitly rejected by the UNIDROIT Principles of International Commercial Contracts 6 Specific to Canadian contract law both in Québec and in the country's common law provinces 7 Specific to civil law jurisdictions, the American Uniform Commercial Code, and Canadian jurisprudence in both Québec and the common law provinces pertaining to contractual and pre-contractual negotiation
v t e

Formation and stages

See also

References