The Sale of Goods Agreement is a legal document used to specify the terms and conditions entered into between the Seller and the Buyer of the Goods. This Agreement can be used by either the Seller or Buyer to Buy or Sell any type of movable goods like furniture, electronics, building materials, etc.
The Sale of Goods Agreement cannot be used for selling immovable properties like buildings, lands, etc.
The main difference between a Supply Contract and a Sale of Goods Agreement lies in the nature of the agreement. In a Supply Contract, both the supplier and the buyer agree to purchase certain goods for a specific period for a fixed price. This can often involve an exclusive business relationship between the supplier and the seller. On the other hand, a Sale of Goods Agreement typically refers to a one-time transaction where goods are sold for a price, without the ongoing commitment like that of a Supply Contract.
No, it is not mandatory. However, having a written Sale of Goods Agreement will help in setting clear terms of sales and avoid disputes in future.
In order for an agreement to be valid, the parties involved must be legally eligible individuals or entities. A minor (under 18 years of age), a person who is not of sound mind, or someone who is intoxicated cannot enter into a Sale of Goods Agreement.
The Sale of Goods Agreement can be for a specific period or until the completion of the transaction. Typically, the duration is till the delivery of goods and settlement of the final payment.
The Sale of Goods Agreement will be legally binding when it has been printed on non-judicial stamp paper or e-stamp paper, and signed by each party. The value of the stamp paper would depend on the state in which it is executed. Each state in India has provisions in respect of the amount of stamp duty payable on such agreements. Information regarding the stamp duty payable can be found on the State government websites.
Each Party should sign and return a copy of the Sale of Goods Agreement. Where a company is a party to this agreement, it should ensure that the Sale of Goods Agreement is signed by an authorized signatory, which is usually a director as authorized by a board resolution of the company.
Each Party should keep a signed copy of the Sale of Goods Agreement. To do this, two different copies can be signed, or if only one copy is signed, it can be photocopied and then distributed between the parties.
The Sale of Goods Agreement includes the following important clauses:
The Sale of Goods Agreement is covered under the Sale of Goods Act, 1930 and the Indian Contract Act, 1872.
If the Goods are sold to an individual person for a non-commercial purpose (other than for self-employment) the Consumer Protection Act, 2019 will also be applicable.
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Sale of Goods Agreement - Template - Word & PDF