Purchase or sales agreement

Different wordings are used for the sales contract. It is also referred to as sales agreement or purchase agreement. The term sales agreement is usually used by the selling party and the term purchase agreement is usually used by the purchasing party. In principle, these agreements are all sales agreements. In The Netherlands, the basis is the same and has its origin in Article 7:1 of the Dutch Civil Code. For other legal systems it might be quite different.

The sales contract involves at least two parties, one of which gives a good and the other pays a price in cash for it. If the buyer is a private person (i.e. not a company) then this is a consumer purchase. A sales contract without a price is also valid. In that case, the buyer must pay a reasonable price. A reasonable price is a price normally used by the seller or a market price.

A sales contract is concluded when an offer is accepted. If the buyer does not accept the seller’s offer and makes a new offer himself, the seller may accept this offer. This is the basis of the price negotiation. Special forms of the sales contract are the consumer sales contract (where the buyer is a consumer) and distance sales contract (where, for example, purchases are made via the Internet).

A sales contract may also be concluded verbally. In many B2B sales, however, it will be more convenient to enter into a written agreement, in order that:

  1. that the rights and obligations of the parties are clear;
  2. there is evidence of the arrangements in the event of a dispute

Obligations buyer and seller

The buyer must pay the purchase price and must make delivery possible. The seller is obliged to transfer and deliver the sold item including accessories. The item must be free of any special encumbrances or restrictions (unless the buyer agrees). The case must correspond to what was agreed in the sales contract. This is called conformity. This applies not only to number, size, weight and characteristics, but also to things that are not specifically included in the agreement, such as tyres on the car or a saddle on a bicycle, etc.

If the seller does not keep to his agreements, there may be breach of contract. In the event of breach of contract, the other party may claim performance, rescission and compensation. If the delivered item does not correspond to the agreement, there is non-conformity. Specifically in the event of non-conformity, a buyer may claim the following:

  1. delivery of that what is missing
  2. repair of the good, unless the seller cannot reasonably do so,
  3. replacement, unless the deviation is too small, or in some cases where the buyer has not handled the good with care.

In the case of consumer purchases, it could also be possible to rescind the contract (unless the deviation is too small) or to reduce the price (proportional to the deviation), but only if repair and replacement are impossible or cannot be expected from the seller. Please note that this is a very concise overview of the sales contract under Dutch law. If you are looking for more information about the (international) sales agreement, please refer to an (international) legal handbook.

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