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What is a Sales Contract?

A Sales Contract makes a purchase legally binding between a buyer and seller in Pakistan. It spells out the key details: what's being sold, the price, when payment is due, and how the goods will change hands. This agreement follows the Contract Act 1872 and creates clear obligations for both parties.

Beyond just recording the sale, it protects everyone involved by setting out quality requirements, delivery terms, and what happens if something goes wrong. Pakistani businesses commonly use these contracts for both domestic trades and international deals, making them essential tools for everything from retail transactions to large commercial purchases.

When should you use a Sales Contract?

Use a Sales Contract any time you're making a significant purchase or sale in Pakistan, especially for business transactions over PKR 100,000. It's particularly important when dealing with high-value items, custom-made products, or agreements that involve multiple delivery stages or specific performance requirements.

This formal agreement becomes essential when selling across provincial borders, handling international trade, or whenever payment and delivery don't happen simultaneously. Pakistani businesses need Sales Contracts for major equipment purchases, bulk commodity deals, and any transaction where you need clear proof of ownership transfer or specific quality standards.

What are the different types of Sales Contract?

Who should typically use a Sales Contract?

  • Business Owners: Most commonly use Sales Contracts for buying inventory, equipment, or selling products in bulk to other businesses
  • Legal Counsel: Draft and review contracts to ensure compliance with Pakistani commercial laws and protect client interests
  • Property Dealers: Rely on these agreements for real estate transactions, especially in urban centers like Karachi and Lahore
  • Manufacturing Companies: Use detailed Sales Contracts for raw material procurement and finished goods distribution
  • Export-Import Firms: Depend on these documents for international trade deals, ensuring clarity on shipping terms and payment conditions

How do you write a Sales Contract?

  • Party Details: Gather complete legal names, addresses, and tax registration numbers of both buyer and seller
  • Product Specifics: Document exact quantities, specifications, and quality standards of items being sold
  • Payment Terms: Define price, payment schedule, and accepted payment methods under Pakistani banking regulations
  • Delivery Details: Specify delivery timeline, location, and responsibility for transport costs
  • Legal Compliance: Use our platform to generate a contract that automatically includes required Pakistani legal clauses and warranties
  • Signatures: Prepare for proper witnessing and stamp duty requirements as per local regulations

What should be included in a Sales Contract?

  • Parties' Information: Full legal names, addresses, and CNIC/NTN numbers of buyer and seller
  • Offer Details: Clear description of goods/services, quantity, and agreed price as per Contract Act 1872
  • Payment Terms: Payment schedule, method, and currency following State Bank regulations
  • Delivery Terms: Specific timeline, location, and transfer of ownership conditions
  • Warranties: Quality guarantees and condition of goods per Sale of Goods Act
  • Dispute Resolution: Governing law clause specifying Pakistani jurisdiction and arbitration process
  • Signature Block: Space for signatures, witnesses, and proper stamp duty as per local requirements

What's the difference between a Sales Contract and a Contract to Sell?

A Sales Contract is often confused with a Contract to Sell in Pakistani business transactions. While both documents deal with property transfer, they serve distinctly different purposes and have different legal effects under Pakistani law.

  • Timing of Ownership: Sales Contracts transfer ownership immediately upon signing, while Contracts to Sell create a future obligation to transfer ownership when certain conditions are met
  • Payment Structure: Sales Contracts typically involve immediate or structured payments, whereas Contracts to Sell often include conditional payment terms or installment plans
  • Legal Protection: Sales Contracts offer immediate buyer protection under the Sale of Goods Act, while Contracts to Sell provide conditional rights until the sale is completed
  • Risk Transfer: In Sales Contracts, risk passes to the buyer upon signing; in Contracts to Sell, the seller retains risk until final transfer

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