Learn about it in one article! 10 elements of a “perfect sales contract” in the eyes of the judge

"Sales Contract" is one of the most common types of contracts in commercial activities. It is also an important evidence for judicial organs to handle contract dispute cases. Trial practice has proven that irregular conclusion of sales contracts is the main cause of disputes.

Then

In the eyes of the judge

A "perfect sales contract"

What should it be like

Let’s take a look

01

The title of the contract must be written correctly

It is very important to clarify the relationship between the two parties in the sales contract. With the development of the economy, customers have more personalized needs for customized products. Especially in the fields of decoration and furniture purchase, there are often situations where the elements of "contract contract" and the elements of "sales contract" compete.

《中国人Article 787 of the Civil Code of the Republic of China stipulates: "The orderer may terminate the contract at any time before the contractor completes the work. If it causes losses to the contractor, he shall compensate for the losses." This provision gives the orderer the power to unilaterally terminate the contract. rights, and it is often difficult to fully prove the contractor’s losses, which makes it difficult for the “seller” to safeguard its legitimate rights and interests when the “buyer” breaks the contract.

If the contractual relationship between the two parties is unclear, the judicial authorities need to determine the nature of the contract between the parties through the specific circumstances of the contract. If the title of the contract is clear and the contract terms further clarify the contractual relationship, disagreements between the two parties on this issue can be avoided to a certain extent.

So in the title, it is recommended to use the words "buy and sell" and "purchase and sale" as much as possible to avoid elements such as "processing", "custom-made" and "contracting".

02

Contract terms must be complete

《中国人Article 596 of the Civil Code of the Republic stipulates: “The contents of a sales contract generally include the name, quantity, quality, price, performance period, place and method of performance, packaging method, inspection standards and methods, settlement method, Terms such as the words used in the contract and their validity."

Therefore, contract terms can be compiled in full or in part with reference to legal provisions. The more detailed and detailed the contract terms are, the lower the probability of disputes between the two parties when various situations arise.

03

The subject of the contract must be clear

"Buyer" and "Seller" are the popular expressions of "Buyer" and "Seller" in law. Clarifying the subject of the contract is the prerequisite for clarifying the rights and obligations of both parties in the contract. Therefore, when concluding a contract, both parties should pay attention to the names of the buyer and seller, preferably in the form of contract terms, and ensure that they are consistent with the signatures and seals of the contract.

04

Describe the subject matter of the contract in as much detail as possible< /strong>

In judicial practice, there are many cases of disputes caused by unclear goods. Regarding the product name, model, quantity, appearance, and size, you should try to be as clear and detailed as possible when signing a contract, so that there will be no ambiguity in the name of the subject matter when someone who is not in the industry reads it. If the name and model of the goods are not clear enough, photos of the samples can be attached when making the contract.

05

The quality/technical standards of the subject matter must be clear

After clarifying the subject matter, the quality/technical standards of the subject matter of the sales contract should also be clarified. If there are multiple product quality/technical standards for some commodities, the buyer and seller should clearly agree on the standards of the subject matter of the contract, so that after the subsequent delivery of the subject matter, both parties have evidence to rely on when the buyer performs its inspection obligations.

06

The performance period and performance location must be clear< /strong>

The performance period is the delivery period, and the seller shall deliver the subject matter according to the agreed time. If a delivery period is agreed upon, the seller may deliver at any time within the delivery period.

01

About the performance period

The parties can negotiate freely, and either party must abide by the contract. If a party still fails to perform its delivery or payment obligations after the expiration of the performance period, it shall bear liability for breach of contract.

But not only the party that fails to perform its contractual obligations after the performance period expires will be liable for breach of contract. Before the expiration of the performance period, if a party expressly expresses or expresses by its own behavior that it will not perform its contractual obligations after the performance period arrives, it will also bear the liability for breach of contract as "anticipatory breach of contract".

02

About the place of performance

The place of performance is not necessarily the same as the place of delivery of the subject matter. It is recommended to use the contract terms. Agreement.

First, the seller should deliver the subject matter at the agreed location while trying to avoid consignees Inconsistency with the buyer. If it is agreed in advance that a third party will receive the goods, it is best to indicate this when signing the contract. If there is no prior agreement and the seller discovers that the consignee and the buyer are inconsistent during delivery, it is best to confirm with the buyer by leaving a certificate before delivering the goods.

Second, it is clearly agreed that the "place of performance of the contract" is in a certain place. Winning the jurisdiction of the local court yourself will also reduce the possibility of jurisdictional objections in the future.

07

"Inspection period" (the buyer's inspection notification obligation) must be agreed upon

In judicial practice, there are many cases where the buyer raises quality objections and disputes arise after the seller claims payment. In addition to the need for clear quality/technical standards mentioned above, unclear agreement on the "inspection period" is also a major factor in disputes.

01

< span style="background-color: #4F82C3; --tt-darkmode-bgcolor: #4F82C3;">For the buyer after receiving the goods

< span style="background-color: #4F82C3; --tt-darkmode-bgcolor: #4F82C3;">Defects that can be directly discovered

That is, the goods delivered by the other party "do not conform to the contract" when the risk is transferred, such as shortage in quantity, inconsistent model, wrong color, etc., the buyer can refuse to sign for it and should inspect the goods upon receipt and notify the seller. If timely notice is not given and the buyer has signed for receipt on the receipt stating the variety, quantity, specifications, etc. of the goods, it will be deemed that the buyer has inspected the quantity and appearance defects, unless there is relevant evidence sufficient to overturn it.

02

< span style="background-color: #4F82C3; --tt-darkmode-bgcolor: #4F82C3;">For the buyer after receiving the goods

< span style="background-color: #4F82C3; --tt-darkmode-bgcolor: #4F82C3;">"Hidden flaws" that cannot be discovered in time

The obligation to notify for inspection is limited by the double exclusion period, which not only requires the buyer to notify the seller within a reasonable period from the date the defect is discovered or should be discovered, but also requires the buyer to notify within 2 years from the date of receipt of the goods. However, if there is a quality guarantee period for the goods, the quality guarantee period shall apply and the 2-year rule shall not apply.

Therefore, it is best to clearly state the buyer’s inspection notice period when drafting the contract. If the buyer claims appearance defects against the seller after this period, the seller may refuse to assume liability for breach of contract.

08

Contractual termination and statutory termination

The parties to a contract may agree on the reasons for rescinding the contract. When the reasons for rescinding the contract occur, the person with the right to terminate the contract can terminate the contract. If no agreement is reached, the relevant provisions of Article 563 of the Civil Code shall apply to the statutory termination of the contract.

《People's Republic of China Article 563 of the Civil Code: The parties may terminate the contract under any of the following circumstances:

(1) Because Force majeure makes it impossible to achieve the purpose of the contract;

(2) in Before the expiration of the performance period, one of the parties expressly expresses or shows by its own behavior that it will not perform the main obligation;

(3) Parties One party delays the performance of a major debt and fails to perform within a reasonable period of time after being urged;

(4) Parties One party delays the performance of its debts or commits other breaches of contract, resulting in the failure to achieve the purpose of the contract;

(5) Law Other circumstances specified.

to continue to perform For an indefinite contract with debt as its content, the parties may terminate the contract at any time, but must notify the other party before a reasonable period of time.

In addition, it should be noted that if the right to terminate the contract is not exercised through litigation or arbitration, the parties need to notify the other party, and the contract will be terminated when the notice reaches the other party; if the notice states that the defaulting party does not perform its obligations within a certain period, the contract will be terminated. If the contract is automatically terminated and the defaulting party fails to perform its obligations within the period, the contract will be terminated upon expiration of the period specified in the notice.

09

The agreement on liability for breach of contract must be clear< /strong>

The agreement on liability for breach of contract is not only a means of restricting the performance of the contract by both parties, but also the basis for the observant party to assert its legal rights after a breach of contract.

The setting of liability for breach of contract can be negotiated by both parties, and is valid as long as it does not violate legal provisions. For example, the defaulting party can be required to undertake actual performance, take remedial measures, pay liquidated damages, use deposit penalties, compensate for losses, request a reduction in price or remuneration, etc.

If the agreed liquidated damages are excessively higher than the losses caused, the people's court or arbitration institution may appropriately reduce it at the request of the parties. If the liquidated damages agreed upon by the parties exceed 30% of the losses caused, it can generally be deemed to be excessively higher than the losses caused.

10

Format terms must fulfill the obligation to provide prompts

In the process of establishing a sales contract, the dominant party will provide a standard clause contract, that is, a contract that is drawn up in advance for repeated use and is not negotiated with the other party when the contract is concluded.

First of all, the standard terms of the contract should follow the principle of fairness to determine the rights and obligations between the parties. Furthermore, if you encounter a situation that significantly reduces your own contractual obligations or aggravates the other party's contractual obligations, you should use reasonable methods to draw the other party's attention. If the obligation to provide notice and explanation is not fulfilled, the other party may claim that the clause does not become part of the contract.

END

Reprinted from: Tianjin High Court