In contract law, a contract of sale, sales contract, sales order, or contract for sale is a legal contract for the purchase of assets (goods or property) by a buyer (or purchaser) from a seller (or vendor) for an agreed upon value in money (or money equivalent).
An obvious ancient practice of exchange, in many common law jurisdictions it is now governed by statutory law. See commercial law.
Contracts of sale involving goods are governed by Article 2 of the Uniform Commercial Code in most jurisdictions in the United States. In Quebec, such contracts are governed by the Civil Code of Quebec as a nominate contract in the book on the law of obligations. In some Muslim countries it is governed by sharia (Islamic law); however, many Muslim countries apply other law to contacts (e.g. the Egyptian Civil Code, based on the Napoleonic Code, which beyond its application in Egypt serves as the model for the civil codes of several other Arab states).
A contract of sale lays out the terms of a transaction of goods or services, identifying the goods sold, listing delivery instructions, inspection period, any warranties and details of payment.
Formation and stages
According to the Civil Code of the Philippines Article 1458, the contract of sale has three stages: negotiation, perfection, and consummation.
- Negotiation begins when prospective contracting parties indicate interest in the contract, ending with its finalization.
In the Philippines, under Article 1458 of the Civil Code, a contract is a contract of sale when ownership is transferred upon perfection of the contract while a contract to sell, although not explicitly stated in the civil code, is when the ownership is not transferred until a suspensive condition is met.