Chapter Outline
8.1 The Nature and Origins of Sales Contracts
8.2 Warranties and Sales Contracts
Introduction
Learning Outcome
•
Recognize nuances of contracts pertaining to sales.
8.1
The Nature and Origins of Sales Contracts
Features of Sales Contracts
Commercial enterprises that engage in buying and selling practices need to be aware of the features and
nature of sales contracts. A contract of sale is a specific type of contract in which one party is obligated to
deliver and transfer ownership of a good to a second party, who in turn is obligated to pay for the good in
money, or its equivalent. The party who is obligated to deliver the good is known as the vendor or seller. The
party who is obligated to pay for the good is known as the vendee or buyer.
It has generally been established that there are six main features of sales contracts. Sales contracts are:
1.
Consensual: they are perfected by mere consent without the need for any additional acts
2.
Bilateral: both parties in the contract are bound to fulfill reciprocal obligations toward each other
3.
Onerous: the good sold is conveyed in consideration of the price, and the price paid is conveyed in
consideration of the good
Figure 8.1 (Credit: JESHOOTS-com/ pixabay/ Attribution 2.0 Generic (CC BY 2.0))
8
Sales Contracts