CHAPTER 13
Memorandum of Sale FOR MANY SALES OF GOODS,
a short memorandum of the agreement may be more than satisfactory. It may be a sufficient record for an order placed by telephone or facsimile for a one-time sale and immediate delivery of goods—a transaction that is completed before the parties would even have time to consider and negotiate a full sales agreement. It may also be adapted for use as a record of each purchase made pursuant to an underlying agreement between the parties establishing a long-term relationship. A memorandum can be drafted quickly and the goods can be sent immediately. Most parties use a letter or invoice format for the memorandum.
Use of Form If you decide to use a memorandum of sale, be certain to cover all essential points of the sale: goods, delivery, price, and payment terms. It is also important that you recognize that the memorandum is merely a sketch of your relationship with the other party and that it does not define that relationship fully. For example, the memorandum does not provide mechanisms for the resolution of disputes that might arise, nor does it state any specific warranties, governing law, rights of inspection, or obligations to mitigate damages. Therefore, before using a memorandum of sale, you should consider whether the following apply. ■
You already have an ongoing relationship with the other party in which such factors are already established and a satisfactory level of trust has been reached.
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You have sufficient reasons to trust the other party because you have made a background check or have received a solid referral.
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Your transaction is small and your risk of loss is minimal.
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You are willing and able to take the risk of loss, perhaps because there will be long-term benefits if you can establish the relationship.
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You are willing to negotiate or modify the memorandum rather than seek enforcement through legal action.
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You are making the memorandum to make a quick sales transaction at minimal cost.
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You are not concerned with which laws will govern and whether the memorandum will be enforceable because you will not seek legal remedies in connection with the agreement.
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