What is a Sale Agreement? Sale Agreements Explained.

What is a Sale Agreement?

A sale agreement is a legally binding contract that clarifies the terms of a sales transaction.

The sale agreement spells out all the details of the transaction so that both parties share the same understanding. One party is the buyer, while the other the seller. Both the buyer and seller may be individuals or entities.

Legal Formalities for a Sale Agreement

The type of sale contemplated in a sale agreement, determine whether or not there are any legal formalities that need to be complied with.

For example: The Alienation of Land Act provides that an agreement for the sale of immovable property must be in writing and signed by both parties i.e. the seller and the purchaser. If the agreement is not in writing or signed by the parties or their duly authorised representatives, such an agreement will be null and void.

Do I need a Sales Agreement?

Sales agreements help protect the parties to a sale transaction by providing the necessary clarity and detail as to the terms of the transaction which helps prevents disputes down the line. This way each party knows what their rights and obligations are:

• the buyer agrees to purchase certain specified goods or services, and the seller agrees to provide the requested number of goods and types of services;

• the buyer agrees to make a purchase on a specific date/stand the seller agrees to provide the goods and services on or by that date;

• The buyer agrees to pay a certain price for the goods or serviceseand the seller agrees to accept that price;

• the contracting parties have recourse if the other party/s violate the terms of the sales agreement.

Types of Sales Agreements

There are as many different types of sales agreements as there are goods, services and properties. Some of the most common sale agreements include:

• sale of immovable property for residential properties, commercial properties or industrial properties

• sale of assets or movable property agreement e.g. which are used when you sell your car

• sale of shares agreements which is used for buying and selling a companies’ shares

• sale of business agreements

At Barter McKellar, our commercial attorneys have extensive experience on advising on, drafting, negotiating and reviewing different types of sale agreements. If you would like to schedule a consultation with one of our specialist commercial lawyers, contact our offices today.