The main clauses of commercial sales contracts

What is the commercial sale contract?

Mercantile sale is included within Mercantile Law and is defined as a decisive contract in current economic activity. Globalization and the modern economy have made the sales contract have to adapt to new forms of business and consumer protection regulations.

By the purchase and sale contract, one of the contracting parties is obliged to deliver a certain thing and the other to pay for it a certain price, in money or a sign that represents it, being the characteristic note of the mercantile sale contract and its main difference. with the civil sale contract, the lucrative character. All the contracts of sale between companies will have a lucrative character.

What is important in the commercial sale contract?

In the commercial sale contract, it is important to establish the bases of the agreement between the parties in the letter or agreement of intent, and later in the sale contract. All this regardless of whether we are dealing with a sale of shares / participations or assets, or if we are dealing with a sale of goods, commercial transaction, etc.

It is important above all that commercial specialist lawyers prepare and review commercial operations from the moment prior to the execution of the sale contract. In this way, the company will have the necessary and systematized information to carry out the commercial sale with the best conditions and guarantees.

The commercial covenants and clauses that are included in the commercial contracts in the sall of goods, will help make the sale operation a success.

What clauses should the commercial sale contracts contain?

All mercantile operations and commercial transactions between companies must be formalized through written contracts, which are not only a formalism, but are the fundamental pillar to guarantee the fulfillment of a commercial operation between businessmen. The clauses of a contract are the most important element in commercial sale contracts. It is essential to write carefully to avoid surprises.

In most commercial agreements the following clauses are essential to make a good agreement: 

-The parties: It is an essential element of commercial sales contracts, and is responsible for defining the people who sign the contract, in this case it will be the people who legitimately represent the companies who sign the contract, either in their own name or of the company, the validity of the contract will depend on it, therefore, the people who sign must have sufficient legal capacity to sign and be bound according to the terms of the contract.

 The parties must be sufficiently defined in the commercial sale contract so that they can be identified without any problem.
 
-The object: It is another of the essential elements of the commercial sale contract, the object is the relationship or operation that they intend to regulate between the parties. Therefore, if we are dealing with a contract of sale of merchandise, the object of the contract of sale will be the merchandise. 

-The duration: It is the duration of the contract or the term in which each of the parties must fulfill their obligations. In this case, and if the parties deem it appropriate, it should be indicated in a clause if the contract can be extended when it ends, and for how long it can be extended.

It is recommended to establish a certain period to carry out the contract.

-The Obligations of the Parties: Depending on whether we are facing one type of contract or another, the parties will have some obligations or others.

But what is clear is that in the wording of the clauses of the obligations of the parties, the requirements of the contract must be determined with sufficient clarity, so that there is no doubt in the future or conflicts between the parties can arise. . Therefore, it is recommended to describe in a descriptive and enumerated way what the obligations of each of the parties will be.

-The Price and Method of Payment: Commercial contracts are onerous, therefore, an essential part of the agreement will be to clearly indicate the price of the service, and indicate whether it includes VAT or not, or other similar taxes applicable to the operation. trade.

It is recommended that the payment method be established in detail (if it is done in cash, through

-Causes for termination: This clause operates when one of the parties wants to disassociate from the contract, either due to the expiration of the term; for breach of the other part of its obligations; or other causes agreed by the parties. To ensure that each part of the contract can be untied without any problem, it would be advisable to write it with some protection.

For example, the termination of the contract for breach of one of the parties, in this case, the parties understand that they have entered into a relationship under certain assumptions of trust, in relation to the capacity and experience of the other party, so when existing a breach by one of the parties, entitles the affected party to terminate the contract and ask for compensation for the damages caused.

-Applicable law and jurisdiction: It is one of the clauses that may have the most future significance in the event of conflict between the parties, since this clause establishes which law the contract is submitted to, and before whom any conflict resulting from the relationship of the parties derived from the contract, its interpretation, execution or breach.

In this clause, the Courts closest to the parties' commercial domicile are usually agreed. However, it is also common to be in some contracts with the submission of any conflict related to the contract to Arbitration, very effective in commercial contracts.

-Non-competition and confidentiality agreement: It is a very effective clause in some of the commercial sale contracts, through this clause for a certain period of time (no more than 2 years due to competition issues), the Seller, who acts directly or indirectly through persons linked to it, undertakes not to carry out the same or similar activities, nor to advise, manage or control third parties that carry out such activities.

In this way, the Seller should be obliged to keep the strictest secrecy regarding all the confidential information that it knows and not to make representations to third parties.-Annexes and Side letters: The Annexes, which are part of the contract, collect the complementary clauses written or that help to understand what is established in the commercial sale contract.

On the contrary, the side letters (or separate letters) are not an integral part of the commercial sale contract but serve to clarify or modify some aspect of the contract. They are used above all in company acquisition and merger contracts.

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