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Sales contract
The sales contract is the legally binding agreement reached by the seller and
the buyer (the parties to the contract). It can be made orally or in writing, although
it is usual for the contract to be drawn up in writing to prevent disputes.
There are three ways to conclude a sales contract:
1. This is the most normal way of concluding a sales contract, because most
offers are non-binding. As non-binding offers can be changed or withdrawn at any
time, a sales contract does not exist until the seller confirms the order, making any
changes impossible.
2. Sellers tend to make firm offers when trading in goods where the prices
fluctuate a lot. They set a fixed and if the buyer doesn't place an order within the
period of time where, this price is valid, the offer with expires. The seller can then
make another offer with new prices to keep up with the prices on the market.
3. In this case, if the buyer is not interested in the goods, he is expected to
return them within a certain period of time, otherwise he will have to pay for them.
After a sales contract has been concluded, the seller and buyer have to fulfil
certain liabilities (that means there are certain things they have to do).
The seller's liabilities are:
- To deliver the goods on time and in perfect condition.
- To ensure that the title to the goods is transferred to the buyer in other words, the
seller has to make sure that the buyer becomes the owner of the goods. This is
normally done by passing a special document, the document of title, to the buyer.
The buyers liabilities are:
- To accept delivery of the goods (this prevents him changing his mind after the
goods have been sent).
- To pay for the goods within the time agreed.
If one party doesn't fulfill its liabilities, the contract is broken (this is called
breach of contract). In this case the other party (injured party) can claim
compensation.