CHAPTER 15
Conditional Contract of Sale IF GOODS ARE OF HIGH VALUE,
a buyer may want to have the use of the goods immediately and pay for them over time. The following contract is for a sale of this type— known as a conditional sale. This contract should be used only if the payment period is relatively short, such as six months. If payments will extend for one year or more, a more detailed lease or credit agreement should be made instead.
Sample: Conditional Contract of Sale On [date], this Agreement is made between [name], [a/an] [description and nationality] of [address] (the Seller) and [name], [a/an] [description and nationality] of [address] (the Buyer). The parties agree as follows:
The agreement is binding on the parties who sign it, and these should be the parties identified in this clause. Give the full name of each party, and if a party is an entity, describe the type of entity (partnership, corporation, limited liability company, nonprofit corporation, and so forth). The business address of each party may be given here or at the end of the agreement immediately following their signatures. In international contracts, the description of each party includes the party’s nationality. Examples of descriptions: “a Société Anonyme organized and existing under the laws of France,” “a partnership organized and existing under the laws of the State of California in the United States of America,” or “an individual who is a citizen of Singapore.”
COMMENT:
1 . S A L E O F G O O D S . The Seller agrees to sell and the Buyer agrees to purchase the following goods (the “Goods”): [list].
The description of the goods should be specific, including as appropriate model numbers, colors, quantities, and so forth. If specifications are furnished by the Buyer, it is wise to include them as a separate attachment with a reference here incorporating them into the agreement.
COMMENT:
2 . P U R C H A S E P R I C E . The Buyer agrees to pay [currency and amount, e.g., US$18,000] for the Goods (the “Purchase Price”) in accordance with the following schedule: [specify, e.g., US$6,000 in cash at the time this Agreement is signed by both parties; and the balance of US$12,000 in 6 equal monthly installments of US$2,000 each, to be paid on the tenth day of each month beginning on (date) and ending on (date).
Although the period of payment is short, the parties may modify this clause to add interest to the payments. Interest should be made payable at the same time as each monthly payment to which the interest applies. As an incentive for early payment, the seller might waive interest “penalties” for pre-payment.
COMMENT:
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