Procurement and Sale Agreement

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Procurement and Sale Agreement

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Procurement and Sale Agreements

Rs.14,999/- Exc. Of GST

About Procurement & Sale Agreements

The Procurement and Sale of any product or service involve numerous obligations on part of the person providing the goods or services, as well as the person receiving the goods and services. Questions always arise as to what will happen if the product is damaged when received, who is responsible for damages caused during transport, who is responsible for arranging transport, who will pay the taxes applicable, the period within which the products may be returned, etc.

 

In certain instances, these disputes are governed by statutory law. In other instances, parties may opt to have a differing practice as is customary to their style of conducting business. In both instances, however, it is beneficial to have the terms and conditions of the procurement and sale written down in a formal contract to ensure that both parties are aware of their obligations and prevent the other party from going back on their word.

 

These agreements are particularly important when discussing large bulk orders for goods. The prices of goods tend to vary depending on the market conditions, and any delay in delivery can adversely affect the parties. Also when goods are bought in bulk, it is for the purpose of a project that needs to be completed on a strict timeline. Delay in delivery of the goods may result in failure to meet the timeline of the project, which would, in turn, expose one party to legal risk. Therefore, having agreements in place that consider all these possibilities is necessary, not only to define one’s obligations but also to protect oneself when the other party fails to perform their obligations.

Frequently Asked Question

What is the purpose of a procurement or sale agreement?

Sale Agreements finalise the sale of products, goods, or services in exchange for a certain consideration that is paid.

The main purpose of the document is to put into writing the terms and conditions under which the transfer of the property, product, good, or service will occur. It must be signed by both parties to showcase their mutual understanding and meeting of minds as to the conditions which must be fulfilled by both parties for the sale to occur. The sale agreement is an enforceable document.

How is a sale agreement different from a sale deed?

The Sale Deed transfers the title to the product, property, good, or service from one party to another. It is a formal transfer of title. The sale agreement or agreement to sale, while enforceable like the sale deed, does not constitute a transfer of title. It merely highlights the terms under which the sale is to occur. The sale agreement is not a “document to the title” but it confers the right to the buyer to acquire the property after compliance with the terms of the contract.

How is a Sale Agreement different from a Purchase Order?

Purchase Orders are not enforceable. They merely state that the buyer seeks to purchase certain goods at a certain price from the seller. They are not a valid and enforceable contract until a form of acceptance from the seller is communicated to the buyer. The seller has complete authority to reject the purchase order or modify it, thereby creating a counter-offer which must then be accepted by the buyer.

In a Sale Agreement, however, the terms are clear to both parties and it is agreed that upon fulfilment of the terms and conditions contained within the contract, the buyer has the right to acquire the property from the seller.

Why do you need a Sales Agreement?

Without a sales agreement, you may not be able to protect your investment, or you may inadvertently accept liability for something out of your control. You should consider using a sales agreement any time you buy or sell goods that require more than a simple transfer of ownership. If you intend to deliver the goods at a future date or if you want to transfer liability to the other party, a sales agreement can help you protect yourself or your business.

What terms should be contained within a Sale Agreement?

The following terms and conditions are generally found within Sale Agreements –

  1. Identification, purchase, and sale of particular goods, services, etc.
  2. Payment amount and method of payment
  3. Timeline under which payment must be completed.
  4. Timeline for delivery of goods and/or services.
  5. Details of parties
  6. Communication of Offer and Acceptance by the respective parties.