Sales Agreements in General

Trade can have a number of objects. For example, the parties can agree on sale of movable goods, real estate, services, or even delivery of an entire manufacturing plant. Therefore, sales agreements can vary heavily from simple contracts of sale to complex delivery agreements.

The simplest manner for a sales agreement to arise is to provide an acceptance of an offer. The Contracts Act regulates, among others, the conclusion of contracts, making of offers, responding to offers, and revocation of offers. Offer and acceptance of the offer made are discussed further in the chapter [Offer and Reply].

In all significant transactions, it is worthwhile to prepare a written contract of sale or sales agreement, outlining the agreed terms. Generally, the parties are free to agree on the terms of sales agreements.

Trade in movable goods is regulated by the Sale of Goods Act, and international trade by the United Nations Convention on Contracts for the International Sale of Goods. These statutes contain provisions on, among others, properties of goods, delivery delays, remedies for defects and liability for damages. The statues are discretionary, which means that it is possible to deviate from these statutes by way of an agreement of the parties. However, in the absence of such agreement, the provisions of these statutes will be applicable.

It should be noted that the Sale of Goods Act applies only to sale of goods. While it is not applicable to services as such, corresponding principles of law are to a large extent applicable to sale of services as well.

In all types of sales agreements it is not possible to agree completely freely on all applicable terms. Sale of real property must be made in the form specified by law to be valid. The Code of Real Estate sets forth the mandatory legal requirements for trade in real estate, which must be complied with and cannot be deviated from in the sales contract. Furthermore, the Consumer Protection Act, which applies to agreements between a consumer and businesses, contains a number of provisions that are mandatory in the consumer’s benefit. Trade in real estate and consumer trade are discussed separately in [Purchase and Sale of Immovable Property] and [Consumer Trade and Consumer Service Agreements].