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Sale of Goods Terms

Well-drafted sale of goods terms documents are essential to protect business interests and ensure smooth commercial transactions.

This is an exhaustive guide on the drafting of sale of goods terms, particularly for businesses and legal professionals in the UK. 

The content will cover the essential elements of sale of goods terms, their importance in commercial transactions, and how Lawhive can assist in creating customized, legally compliant terms that protect business interests. 

We’ve written this for: 

• Business owners and entrepreneurs

• Corporate legal departments

• E-commerce companies and retailers

• Commercial managers and contract specialists

After reading this guide businesses will understand the legal aspects of selling goods and appreciate the value of seeking legal assistance to draft and review their sale of goods terms.

Lawhive solicitors are experts in drafting and reviewing sale of goods terms and can help your business avoid disputes and comply with UK regulations.

What are sale of goods terms?

Sale of goods terms are legally binding contracts between a buyer and a seller. The contract details the rights and responsibilities of both parties and is essential for any business that sells goods. Solicitors can ensure these contracts meet the aims of the buyer and seller.

Clear, comprehensive sale of goods terms are crucial for small businesses, particularly in safeguarding against disputes and ensuring compliance with the law.

Key elements of sale of goods terms

Sale of goods terms will vary depending on their circumstances, whether a business sells to consumers or other businesses and what industry they operate in. 

Commonly they will include the following:

• Description of goods - clearly define the goods being sold, include specifications and quality standards. Goods need to be described accurately and in detail 

• Price and payment terms – Outline the price, payment schedule and methods of payment (e.g. bank transfer, credit card). Addressing what happens when payments are late can avoid future disputes

• Delivery terms - detail the logistics of delivery, including timing, risk transfer, and which party is responsible for costs

• Warranties and guarantees - specify any warranties or guarantees offered, and the obligations they impose

• Liability and indemnity - set out the limits of liability and indemnification clauses to protect against potential claims

• Retention of title - explain the conditions under which ownership of goods passes from seller to buyer

• Dispute resolution - include clauses for resolving disputes, whether through arbitration, mediation, or litigation. These methods are known collectively as alternative dispute resolution, as they are an alternative to time-consuming and costly court cases

Legal framework for sale of goods terms in the UK

In the UK, the Sale of Goods Act 1979 governed written and verbal contracts for the sale of goods. 

There are some key provisions you should be aware of. It stated that goods must be sold as described, be of satisfactory quality, and set timelines for customers returning faulty products to claim a refund or compensation in the courts.

It was replaced by the Consumer Rights Act 2015. This act gives consumers more protection, particularly in terms of rights to return faulty products and get a refund, replacement or repair and includes new rights for consumers who purchase digital content.

The act also includes implied terms, terms not expressly included in a contract but assumed to be included. These are equivalent to the implied terms from the Sale of Goods Act 1979, but apply to consumers not other businesses.

These are:

• The service must be provided with reasonable care and skill

• If the time and charge have not been agreed, the service must be provided within a reasonable time and at a reasonable charge

• Information provided to the consumer by or on behalf of the trader is incorporated as a term of the contract if the consumer takes it into account in deciding whether to enter into the contract or makes a decision about the service after entering into the contract

• Goods must be of satisfactory quality, fit for purpose, match the description, sample or model, and be installed correctly (if part of the contract)

Drafting custom sale of goods terms

When drafting custom sale of goods terms, solicitors have a few main principles in mind. 

Firstly, it’s essential to tailor sale of goods terms to business needs. Doing so ensures your transactions are clear, fair and legally sound. 

Your terms should reflect the specific needs and risks of your business. You can customise terms based on whether you are selling to a consumer or business audience. It is also important to include specific terms related to product specifications. 

Terms should also comply with regulations. An expert solicitor can draft or review a sale of goods terms document to ensure terms are in line with UK law and industry-specific regulations.

Once established, your terms shouldn’t stand still forever. It’s important to regularly review and update goods supply agreements to reflect changes in the law and business practices.

Common pitfalls in sale of goods terms

There are some common pitfalls that businesses often make when drafting sale of goods terms:

• Ambiguity and vagueness: unclear or poorly defined terms expose risks in terms of disputes. It’s crucial to avoid legal jargon where possible. Instead, use clear and concise language to ensure all parties understand the terms

• Inadequate protection: potential issues arise when terms do not adequately protect a business’s interests. It is important to ensure limitation of liability clauses are comprehensive 

• Non-compliance: there are consequences of failing to comply with legal requirements and industry standards

Why choose Lawhive for sale of goods terms?

There are several good reasons to turn to Lawhive solicitors for assistance drafting your sale of goods terms, here are three popular reasons:

• Expertise in commercial law – Lawhive solicitors have a deep understanding of UK commercial law and its application to sale of goods terms

• Combination of technology and legal expertise - Lawhive leverages technology to provide efficient and cost-effective services

• Tailored solutions - we provide customised terms that align with business objectives and legal requirements

Legal services for sales of goods terms

Robust sale of goods terms protect businesses from commercial risks and help prevent disputes. 

Working with Lawhive gives your business access to solicitors who specialise in these central business contracts.

For professional assistance in drafting or reviewing your sale of goods terms contact us today for a free case assessment.