When two parties wish to buy and sell goods, they will generally enter into a sale of goods contract. The contract will govern the business relationship and any disputes that arise between the buyer and seller. You generally need the following to be present in order to legally form a contract:

  • Mutual agreement of the buyer and seller to the contract terms;
  • Offer and acceptance of the contract; and
  • Consideration.

Article 2 of the Uniform Commercial Code (UCC) regulates transactions for the sale of goods. Take note that “goods” only refers to items that are tangible and movable. As such, Article 2 of the UCC would not apply to real estate transactions, leases, or service contracts.

What Should be Addressed in the Contract?

Contracts for the sale of goods can vary in form. Parties can also negotiate what terms to include in the contract and how specific to be. However, some things you probably should address in your contract are:

  • Names of the parties;
  • Specific goods being purchased;
  • Quantity of goods;
  • Agreed price;
  • When, where and how the goods will be delivered;
  • When, where and how payment will take place;
  • Warranties;
  • Termination; and
  • Dispute Resolution.

If your contract is missing important terms such as price and place of delivery, the UCC contains gap filler provisions that will address these terms.

For example, if the place of delivery is not listed in the contract and there is otherwise no understanding between the parties about where the goods will be delivered, the goods will be delivered to the seller’s place of business.

Do I Need to Put the Contract in Writing?

While not all contracts are required to be in writing, you should still put your agreement in writing in case a dispute arises. This is beneficial to both parties. However, under the Statute of Frauds there are certain sale of goods contracts that must be in writing in order to be legally enforceable:

  • Contracts for over $500 worth of goods; and
  • Contracts that cannot be fully completed within one year.

Do I Need to Hire an Attorney to Help With a Sale of Goods Contract?

While retaining an attorney to draft a sale of goods contract is usually not a requirement, it would be helpful to do so. The UCC is a very complex and confusing law with many loopholes. The above information is just a general overview of what to include in your contract.

The UCC will impose other requirements depending on your certain situation. A business lawyer near you can inform you of any laws your contract will be subject to and help protect your rights by including all important information in the contract. If your contract is breached, an attorney can fight to help you receive what you are legally entitled to, whether it be the physical goods that were never delivered or money damages.