Notes on the Law on Sales
Definition of Sales:
The law on sales governs the contractual agreement where one party (the seller)
transfers ownership of goods or services to another party (the buyer) for a price or
consideration.
Essential Elements of a Sale:
Agreement:
A mutual consent between the buyer and the seller.
Offer and acceptance must be present.
Subject Matter:
Goods, services, or property that is identifiable and transferable.
Price:
Consideration paid or promised in money or equivalent.
Transfer of Ownership:
Ownership or title is transferred from seller to buyer.
Types of Sales:
Sale of Goods:
Transfer of tangible movable items.
Real Estate Sales:
Transactions involving land or immovable property.
Conditional Sales:
Transfer occurs only upon fulfillment of certain conditions (e.g., installment sales).
Auction Sales:
Public sale where goods are sold to the highest bidder.
Key Legal Principles in Sales Law:
Obligations of the Seller:
Deliver the goods or property as agreed.
Ensure the goods are free from any legal encumbrances.
Obligations of the Buyer:
Pay the agreed price.
Accept delivery of the goods or property.
Warranty:
Express or implied assurance about the quality or condition of the goods.
Risk Transfer:
The risk generally transfers to the buyer upon delivery unless otherwise agreed.
Performance:
Completion of duties under the contract, such as payment and delivery.
Legal Remedies for Breach of Contract:
For the Seller:
Right to recover the price.
Right to stop delivery of goods.
Claim damages for breach.
For the Buyer:
Right to reject defective goods.
Claim damages for non-delivery or breach of warranty.
Statutory Framework:
Uniform Commercial Code (UCC) (Applicable in the U.S.):
Governs sale of goods and outlines rights and obligations.
Contracts of Sale Act (Applicable in various jurisdictions):
Provides the foundation for sales contracts and consumer protections.
Consumer Protection Laws:
Protect buyers from unfair trade practices and defective products.
International Sales Law:
United Nations Convention on Contracts for the International Sale of Goods (CISG):
Governs international sales and standardizes rules across countries.
Incoterms (International Commercial Terms):
Defines trade terms like FOB (Free on Board), CIF (Cost, Insurance, and Freight), etc.
Important Concepts in Sales Law:
Title and Ownership:
Ownership must be legally transferred to the buyer.
Delivery:
Physical or constructive handover of goods.
Inspection and Acceptance:
The buyer’s right to inspect goods before accepting.
Anticipatory Breach:
When one party indicates they will not fulfill contractual obligations before the due date.
Conclusion:
The law on sales ensures a clear framework for transactions, balancing the rights and
duties of both sellers and buyers. It protects parties from fraud and ensures smooth
commercial interactions.
