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Friday, 18 November 2011

Essential Elements Of A Contract In Sales

ESSENTIAL ELEMENTS OF A CONTRACT IN SALES


      The situation goes like this, one day Andrew put an ads in a leading newspaper selling his 2009 model car for a 00 US dollar. Bobby saw his ads and called him on the phone that he is interested to pay the car but during the conversation bobby has a terrible reception that he could hardly hear that Andrew accepted of his offer. Bobby tried to confirm his offer by texting Andrew but his message goes for somebody else. After a few days Andrew made another offer to his colleague Cyndi for the same amount. Cyndi thought about it for quite a while and after a few days she decided to leave a voicemail for Andrew confirming his decision to buy the car only if it has MOT and full service history. After a week Jay saw the ads of the car and sent a letter of intent to buy the car of Andrew.


      If he decided not to sell his car the question is does Andrew have a contract or obligation to sell his car to any of the three possible buyers? Personally I believe that the statement above shows that it is absolutely clear that Andrew has not made any contract in any of the possible ways since they have not made a close sales even in verbal and non verbal communication therefore Andrew has all the freedom if he decided not to sell his car. Bobby, Cindy and Jay do not have the rights of claim if they chose to pursue the transaction in buying his car. The following elements in a contract in sales will explain further the situation as written above that such essential elements must be present to presume that there is a contract in sales.


1.    The consent of at least two parties should be present. This simply means that a contract in order to be formed should be present between two or more person and it should be between the consent of the buyer and the seller. In the case of Andrew and his possible buyers the consent between them is not present when Bobby has not made a clear confirmation about his intention to buy the car that Andrew decided to sell it to other person, in the case of Cindy she has made a condition that made clear Andrew does not guarantee to accept such conditions and later Jay has not made any transaction with him because Andrew already decided not to sell the car that he made no response to Jay. The involvement and meeting of mind of at least two parties has not been made, therefore there is no essential elements of contract so there should be no sales. This is the basic foundation of a sales contract and if it has not been met the next few essential contracts below may not be applicable as a clear element in a sales contract.


2.    The condition of the sales should be in the form of goods. Andrew is selling car so the element is a goods, therefore there is a possibility of sales. (But since the first essential element of sales which is the consent of at least two parties has been void already there are still no sales involved).


3.    There should be transfer of the property, the ownership or possession of the goods should also be transferred. If there should be sales automatically the rights of the seller in the goods he is going to sell will go entirely to the buyer. The physical transfer or delivery of the goods is not necessarily essential in the contract although it can be stipulated between the buyer and the seller. Again this element only applies if there is consent between two or more parties.     


4.    Consideration of payment should be made in cash, the physical characteristic of money is the payment that should be applicable in a certain condition that the payment has been made through goods and services there should be another contract or stipulation to make it clear that it is a valid payment. It can also be a combination of money and goods to clear the payment but definitely the form of cash is the most accepted payment methods to clear the obligation of the buyer.


      There are many other considerations and essential elements involved depending on sales and the availability of goods they are going to buy and sell that a simple appliances or even a simple dress must require a receipt, a guarantee to protect the buyer. Selling land would require a land title, selling goods and services requires originality, a writer should sell his book without plagiarism all these are essential elements in sales that requires a thorough presence and manifestation to protect both the buyer, the seller and the government. In the case of Andrew he is still free from any obligation if he decide not to sell his  car, he can also enjoy the privilege to choice the price he want and to sell to anyone his car since he has not yet made a contract of sales to anyone. (http://www.slideshare.net/varun23oct/the-sale-of-goods-act)


 


     



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