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What Is a Sale of Goods Agreement?

The buying and selling of goods is the foundation of a large percentage of business that is conducted between:

  • individuals,
  • small businesses,
  • corporations, and
  • countries.

Oftentimes, the success or failure of a business depends upon purchasing products at the right time of year and at the right price in order to maximize profits. On the other side of the equation, many companies rely on being able to forecast when their heaviest sales periods will be, and being aware of how much product is needed to meet their customers' demand is vital to their profit margin.

One way companies ensure that they will have either enough product on hand to sell or enough goods available to buy at the right price and at the right time is through a sale of goods agreement.

A Guarantee for the Buyer

The sale of goods agreement is a legally binding contract that stipulates an item or items to be sold at a predetermined time and at a predetermined price. It is an important business tool that protects both the seller and buyer throughout the terms of the business transaction. Once a sale of goods agreement has been entered into, it guarantees that the seller will provide a specific amount of goods at a specific time and for a specific price to the buyer.

This protects the buyer’s interests because it guarantees that they will be able to purchase the specific products they need to operate their business at a guaranteed price that cannot be affected by market pricing fluctuations. The sale of goods agreement also includes stipulations that guarantee remedies to the buyer should the seller breach the terms of the agreement by not providing the listed products in the promised time frame.

Protection for the Seller

The sale of goods agreement also serves to protect the interests of the seller by guaranteeing that the buyer is committing to the purchase of a certain amount of products at a certain time and for a specific price. This protects the seller from having a buyer back out of a promise to purchase goods that the seller has already committed capital to produce. The sale of goods agreement provides a method for businesses to pre-plan their sales or purchasing forecasts while also having the security of a contractual obligation that these forecasted numbers will be met.

Create a Sales of Goods Agreement

Use this purchase and sale agreement template to create your sales of goods agreement in just minutes online.