Building BusinessServices

Section 44

Simple sale agreement for goods

Use it for a one-time sale of goods of high value, or goods delivered later or in parts, where an invoice alone is not enough.

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Template for general guidance; not legal advice. Check stamp duty and registration rules in your state. AGREEMENT FOR SALE OF GOODS This agreement is made at Place of signing on Date of agreement between: Seller: name, of Seller: address (the "Seller"); and Buyer: name, of Buyer: address (the "Buyer"). 1. Goods. The Seller agrees to sell and the Buyer agrees to buy: Description of goods, quantity Quantity (the "Goods"). 2. Quality. The Goods will be Quality / condition. The Seller confirms that he or she is the owner of the Goods, that they are free from any loan, charge or claim, and that he or she has the right to sell them. 3. Price. The total price is ₹Total price (₹). GST: GST. 4. Payment. The Buyer has paid ₹Advance paid today (₹) as advance today, and the Seller acknowledges receiving it. The balance will be paid Balance payable when and how. 5. Delivery. The Seller will deliver the Goods at Place of delivery on Date of delivery. Transport, loading and insurance will be paid by Transport, loading and insurance paid by. 6. Ownership and risk. Ownership of the Goods will pass to the Buyer when the full price has been paid and the Goods are delivered. Risk of loss or damage passes to the Buyer at the same time. 7. Inspection. The Buyer may inspect the Goods within Days to inspect after delivery days of delivery and must report any shortage or defect to the Seller in writing within that time. If not reported, the Goods will be treated as accepted. 8. Warranty. Warranty, if any. 9. Failure to perform. If the Seller fails to deliver, the Seller will refund the advance in full within 7 days. If the Buyer fails to pay the balance on time, the Seller may cancel this agreement by written notice and sell the Goods to someone else; the Seller may keep from the advance only the actual loss caused, and will refund the rest. 10. Documents. On full payment, the Seller will hand over the invoice and all papers relating to the Goods (warranty cards, manuals, purchase bills, as applicable). 11. Disputes. The courts at Courts of which city will have jurisdiction over any dispute under this agreement. Signed on the date and at the place written above. Seller: ______________________ (Seller: name) Buyer: ______________________ (Buyer: name) Witnesses: 1. ______________________ 2. ______________________

Know before you sign

  • The Sale of Goods Act, 1930 governs contracts in which a seller transfers, or agrees to transfer, ownership of goods to a buyer for a price. If your agreement is silent on when ownership or risk passes, the Act's general rules decide it, so write clause 6 clearly.
  • The agreement must also meet section 10 of the Indian Contract Act, 1872: free consent of competent parties, lawful consideration and lawful object.
  • A sale agreement does not replace a GST tax invoice or bill of supply. If the seller is registered under GST, an invoice must still be issued at the time of supply.
  • For second-hand machinery or vehicles, ask for the original purchase bill and check that no bank loan or hypothecation is pending on the goods.
  • Stamp duty on agreements is set by each state. Check your state's rate before you sign.
Sources (2)
  1. The Sale of Goods Act, 1930 (Act No. 3 of 1930) · 1930
  2. The Indian Contract Act, 1872 (Act No. 9 of 1872): sections 10 and 27 · 1872

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