When is a Sale a Sale?
Commercial litigation can arise from a variety of disagreements between companies, vendors, and the like. Often, these disagreements involve the sale of goods from one party to the other. An important factor to consider in any case involving the sale of goods is when a sale becomes final. In other words, when is the sale a sale?
For a valid sale to occur, five characteristics generally must be present:
Valid parties
One party is the seller, who agrees to provide goods to the other party. The other party is the buyer, who agrees to pay a set price for the item.
2. An item available for sale
This requirement is somewhat self-explanatory. The item for sale could be any number of things, from a single pencil to a fleet of vehicles.
3. A specific price for the item
The parties must agree on the price of the item for the sale to be finalized. In many everyday cases, such as shopping at the grocery store, there is no negotiation on pricing. As the buyer, you either accept the price or you do not buy the item. However, in other sales there may be some negotiation as to the cost of goods, and the parties must agree to a price in order to finalize the transaction.
4. Consent of all parties
The parties must agree to all material terms of the sale, including the price as noted above. Commercial contracts can involve far more complex terms than just pricing, so it’s important to ensure that all of the material terms are agreed to in order for a sale to be finalized.
As with most contracts, consent to a sales contract can be express or implied. It is generally best practice for parties to express their consent in writing, in order to avoid future disputes.
5. Acts required to fulfill the contract
Generally, the acts required to fulfill a contract are payment of the purchase price and delivery of the goods to be purchased. Some sales agreements can include more complex terms, and if a contract includes specific terms they also must be fulfilled.
If even one of these characteristics is not present, then more likely than not, the sale is not actually a sale.