Contract of Sale
Definition - What does Contract of Sale mean?
A contract of sale is a contract in which one party agrees to sell something to another party.
Once contracts of sale have been signed by both parties, they are legally binding. This means that if one of the parties does not meet its obligations in the contract, then the other party can sue him or her to try to force him/her to do so.
Justipedia explains Contract of Sale
Contracts of sale are commonly used when large volumes of a certain product are being bought and sold. For example, if a solar panel company is ordering a large volume of components from a supplier, they might negotiate a contract of sale. This can help each company to ensure that the other party will meet its responsibilities in the deal. However, many smaller purchases, such as customers buying things at clothing stores or restaurants, do not require a contract of sale. This is because the amount of money being dealt with is much smaller.
A contract of sale is also used in the purchase/sale of a home or piece of real estate, as a formal agreement between the buyer and seller.