Contract Management

Contract refers to an agreement between two parties that creates an obligation to perform
particular duty

The following are the sale of goods contract

A sale of goods contract refers to contract by which seller transfers or agrees to transfer the
property in goods the buyer for money consideration called price

 Sales to businesses and consumers

Consumer contract is a contract between the consumer and the trader

 The price. There are number of ways to determine the price of goods in sale of goods
contract. The most obvious is for you to negotiate a specific price with the buyer
 Price lists. if you are using a price list , it’s important to establish which price is the
relevant one you might want to include a clause that states that a price is set according to
price list that might change from time to time
 Charges and expenses. if other charges and expenses are involved when carrying out a
contract, you should consider whether to name them and say who is responsible for them.
if you are seller, you might want to increase the prices if your expenses increase between
the of contract and the date of supply. it might be a good idea to put a clause in the sale of
goods contract to reflect this.
 Third party valuation. If the price is determined by the third parties’ estimate, it’s
important to note that if the third party doesn’t make the valuation; the contract might be
cancelled altogether.
 VAT. If you sell goods to consumer the price will always be deemed to include VAT, if
you sell goods to business customers, it is accepted unless stated otherwise the price
includes VAT.
 Time for payment it is important to state in contract the time for the buyer to pay the
goods. the states that payment is due in full once goods are delivered
 Late payment clauses
Although you might both intent to fulfill the duties of the contract, it’s better to agree what
should happen if the buyer fails to pay on time.
  Late payments of commercial dates when you draft commercial agreements .you also
consider the effects of late payment of commercial dates; the act of 1998 protects the
suppliers in business to business contracts.
 Delivery. This means the transfer of ownership of the goods from seller to the buyer. if
you deliver the goods yourself you usually specify that the delivery is by you handling
the goods to the buyer
 Place of delivery. When you are selling goods, it’s important to specify in contract the
place for delivery of goods.
 Date of delivery. the buyer will want you to generally agree on the date of delivery if you
agree on a specified date then you fail you are breaking the contract.
 Delivery by installments .the buyer doesn’t have to accept this unless they agree on it
 Risk and delivery. if you are the seller, it’s better to state that the risk in delivery of goods
passes with the buyer.
 Retention of the tittle clauses. if you include a retention of tittle clauses in a contract, the
buyer won’t own the goods until they are paid for.

The following are the rights of the seller

 To reserve the right of the disposal until certain conditions are fulfilled
 To assume that the buyer has accepted the goods where conveys his acceptance
 To deliver goods only when applied for by the buyer
 To deliver the goods in installment when so agreed
 To exercise lien and retain possession of the goods, until the payment of the price
 To stop goods in transit and resume possession of the goods until payment of the price
 To resell goods under certain circumstances
 To withhold delivery of goods when the property in the goods has not passed to the buyer
 To sue buyer for the price when the property in the goods has passed to the buyer, when the
price is payment on ascertain day in terms of the contract and the buyer fails to make the
payment

The following are the rights of the buyer

 To delivery of the goods as per the contract

 To reject the goods as they are not of his quality ,description and others
 To repudiate the contract when the goods are delivered in installment without any agreement
to that effect
 To be informed by the seller, when goods are to be send by the sea route such that he may
arrange for their insurance
 To have reasonable opportunity to examine the goods for ascertaining whether they are in
conformity with the contract
 To sue the seller for recovery of the price. If already paid. When the seller fails to deliver the
goods
 To sue the seller for the damages if he rejects to deliver the goods
 To sue the seller for specific performance

The following are the rights of unpaid seller

 The right of lien .this means lawfully right to retain the goods possession until the full
price is received. Unpaid seller can exercise his lien in the following cases
When the goods have been sold on cash basis
When the goods have been sold on credit bases and the period of credit expires
When the buyer has become insolvent if the contract has not yet expired
 Termination of right of lien
Seller’s right of lien is terminated in the following cases
The right of lien once lost will not be restored
When the seller waives his right of lien on the goods
 Right of stoppage of goods in transit
It means stoppage of goods in transit to take possession until payment is made .its cases
include
When the buyer becomes insolvent
The seller can stop the goods in transit for the payment of goods not any other charge
 The right of resale if the buyer fails to pay the money in the agreed time the unpaid seller
has the mandate to resale his good
Cases include
When the goods are of perishable nature
Where the unpaid seller has extremely reserved his right of resale
 Suit for price. Where the ownership goes to the buyer ,he or she fails to pay the seller can
sue the buyer as per the agreed