contract law A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more Party (law), parties. A contract typically involves consent to transfer of goods, Service (economics), services, money, or pr ...

, a contract of sale, sales contract, sales order, or contract for sale is a legal

contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of thos ...

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 Common law (also known as judicial precedent, judge-made law, or case law) is the body of law primarily developed through judicial decisions rather than statutes. Although common law may incorporate certain statutes, it is largely based on prece ...

jurisdictions it is now governed by statutory law. See

commercial law Commercial law (or business law), which is also known by other names such as mercantile law or trade law depending on jurisdiction; is the body of law that applies to the rights, relations, and conduct of Legal person, persons and organizations ...

. Contracts of sale involving

goods In economics, goods are anything that is good, usually in the sense that it provides welfare or utility to someone. Alan V. Deardorff, 2006. ''Terms Of Trade: Glossary of International Economics'', World Scientific. Online version: Deardorffs ...

are governed by Article 2 of the

Uniform Commercial Code The Uniform Commercial Code (UCC), first published in 1952, is one of a number of uniform acts that have been established as law with the goal of harmonizing the laws of sales and other commercial transactions across the United States through U ...

in most

jurisdiction Jurisdiction (from Latin 'law' and 'speech' or 'declaration') is the legal term for the legal authority granted to a legal entity to enact justice. In federations like the United States, the concept of jurisdiction applies at multiple level ...

s in the

United States The United States of America (USA), also known as the United States (U.S.) or America, is a country primarily located in North America. It is a federal republic of 50 U.S. state, states and a federal capital district, Washington, D.C. The 48 ...

. In

Quebec Quebec is Canada's List of Canadian provinces and territories by area, largest province by area. Located in Central Canada, the province shares borders with the provinces of Ontario to the west, Newfoundland and Labrador to the northeast, ...

, such contracts are governed by the

Civil Code of Quebec The ''Civil Code of Quebec'' (CCQ; , ) is the civil code in force in the Canadian province of Quebec, which came into effect on January 1, 1994. It replaced the '' Civil Code of Lower Canada'' () enacted by the Legislative Assembly of the Provin ...

as a

nominate contract A contract is an agreement that specifies certain legally enforceable rights and obligations pertaining to two or more parties. A contract typically involves consent to transfer of goods, services, money, or promise to transfer any of those at ...

in the book on the

law of obligations The law of obligations is one branch of private law under the civil law (legal system), civil law legal system and so-called "mixed" legal systems. It is the body of rules that organizes and regulates the rights and duties arising between individua ...

. In some Muslim countries it is governed by

sharia Sharia, Sharī'ah, Shari'a, or Shariah () is a body of religious law that forms a part of the Islamic tradition based on Islamic holy books, scriptures of Islam, particularly the Quran, Qur'an and hadith. In Islamic terminology ''sharīʿah'' ...

(Islamic law); however, many Muslim countries apply other law to contacts (e.g. the

Egyptian Civil Code The Egyptian Civil Code is the primary source of civil law for Egypt. The first version of Egyptian Civil Code was written in 1949 containing 1149 articles. The prime author of the 1949 code was the jurist Abd El-Razzak El-Sanhuri, who received ...

, based on the

Napoleonic Code The Napoleonic Code (), officially the Civil Code of the French (; simply referred to as ), is the French civil code established during the French Consulate in 1804 and still in force in France, although heavily and frequently amended since i ...

, which beyond its application in

Egypt Egypt ( , ), officially the Arab Republic of Egypt, is a country spanning the Northeast Africa, northeast corner of Africa and Western Asia, southwest corner of Asia via the Sinai Peninsula. It is bordered by the Mediterranean Sea to northe ...

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 The Civil Code of the Philippines is the product of the codification of private law in the Philippines. It is the general law that governs family and property relations in the Philippines. It was enacted in 1950, and remains in force to date wi ...

Article 1458, the contract of sale has three stages: negotiation, perfection, and consummation. *Negotiation begins when prospective contracting parties indicate interest in the contract, ending with its finalization. *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. *Consummation happens when the parties perform their respective undertaking, resulting to the extinguishment of the contract. 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.

Contract of sale vs. Contract to sell

In some jurisdictions such as the Philippines and

India India, officially the Republic of India, is a country in South Asia. It is the List of countries and dependencies by area, seventh-largest country by area; the List of countries by population (United Nations), most populous country since ...

, there is a distinction between a contract of sale and a contract to sell. Under the Indian Sale of Goods Act, 1930 paragraph 8.2.2, a contract of sale is an actual sale when there is a transfer of ownership at the time of entering the contract. It is an agreement to sell, however, when the transfer of ownership is to be agreed later. In the Philippines, under Article 1458 of the Civil Code, a contract is a contract of sale when ownership is transferred upon perfection of the contract while a contract to sell, although not explicitly stated in the civil code, is when the ownership is not transferred until a suspensive condition is met.

References

Contract law Sales {{Law-term-stub

Formation and stages

Contract of sale vs. Contract to sell

See also

References