Contract for the sale of goods

Standalone sale of goods contract template for the sale and purchase of goods between businesses. Both of whom are within the UK, governed by English law and drafted generally for the benefit of the seller.

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When do I use this document?

A sale of goods contract template should be used if:

  • you are a regular seller of goods to business customers
  • both the seller and buyer are based in the UK
  • you want a contract prepared more for the benefit of the seller than the buyer

What are the key features?

  • cover sheet and Appendix to be completed with details of seller, buyer, goods, specification, delivery date and location, price and other additional terms
  • schedule of contract terms, with 21 paragraphs over 9 pages
  • provisions relating to goods specification, delivery, ownership and risk and price and payment
  • warranties and remedies for breach of warranty
  • exclusions and limitations on seller’s liability
  • force majeure and termination clauses

What else do I need to know?

A business which sells goods to other businesses may wish to do so on the basis of a standalone contract of sale rather than on its own standard Terms and Conditions.

What terms are implied in contracts for the sale of goods?

The sale of goods on a B2B basis is governed principally by the Sale of Goods Act 1979 (“SOGA”), in conjunction with the Unfair Contract Terms Act 1977 (“UCTA”)?

Terms implied into a B2B contract for the sale of goods include:

  • title to goods: an implied condition that the seller has the right to sell the goods
  • encumbrances: an implied warranty that the goods are free from any charge or encumbrance not disclosed or known by the buyer
  • quiet enjoyment: an implied warranty that the buyer will enjoy quiet possession of the goods
  • sale by description: if the contract is for the sale of goods by description, an implied condition that the goods will correspond with the description
  • satisfactory quality: an implied condition that the goods are of satisfactory quality. Goods will be of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking into account any description of the goods, the price (if relevant) and other relevant circumstances
  • fitness for purpose: if the buyer has made the seller aware of any particular purpose for which the goods are being bought, an implied condition that the goods are reasonably fit for that purpose (unless the circumstances show that the buyer did not rely, or that it is unreasonable for the buyer to rely, on the seller’s skill or judgment)
  • sale by sample: if the contract is a sale by sample, an implied condition that the bulk will correspond with the sample and will be free from any defect making their quality unsatisfactory, which would not be apparent on reasonable examination of the sample
  • delivery by instalments: unless otherwise agreed, the buyer is not obliged to accept delivery of goods by instalment

What makes goods of “satisfactory quality”?

Goods will be of satisfactory quality if they meet the standard that a reasonable person would regard as satisfactory, taking into account any description of the goods, the price (if relevant) and other relevant circumstances.  Quality of goods include their state and condition and the following are aspects of the quality of goods (in appropriate cases):

  • fitness for all the purposes for which goods of the kind in question are commonly supplied
  • appearance and finish
  • freedom from minor defects
  • safety
  • durability

The implied term as to goods being of satisfactory quality does not extend to any matter which makes them unsatisfactory:

  • which is specifically drawn to the buyer’s attention pre-contract
  • which ought to have been revealed by a pre-contract examination carried out by the buyer
  • which out ought to have been apparent on a reasonable examination of the sample, in the case of a contract for sale by sample

Can the SOGA implied terms be excluded or restricted?

Yes under UCTA, with certain exceptions and, for others, provided that the exclusion or restriction is reasonable.

For example:

  • title to goods, encumbrances and quiet enjoyment: liability under these implied terms may not be excluded or restricted
  • sale by description, satisfactory quality, fitness for purpose and sale by sample: liability for breach of these implied terms may be excluded or restricted by a term in the contract provided that the term satisfies the requirement of reasonableness under UCTA

The UCTA test of reasonableness, amongst other matters, requires regard to be given as to whether the non-breaching party knew or ought reasonably to have known of the existence and the extent of the term (having regard, among other things, to any custom of the trade and any previous course of dealing between the parties).

When do I use this document?

  • as the disclosure letter to be delivered at closing of an investment in a private limited company
  • for general and specific disclosures to be given by the persons acting as warrantors under the investment or subscription agreement

What are the key features?

  • in letter form from the warrantor(s) to the investor(s)
  • introductory paragraphs, linking the disclosure letter and disclosures to the warranties in the investment or subscription agreement
  • general disclosures of certain matters, including:
    • the contents of the disclosure documents, which are usually the documents provided to the investor(s) during due diligence and to be set out in an index to the disclosure letter
    • in relation to commercial property, matters available from public searches
    • matters which would be available from:
      • a Companies House search of the target company
      • a winding-up search on the target company
      • a search of the UK Intellectual Property Office
    • matters disclosed in correspondence between the parties and their advisers
  • specific disclosures against the warranties to be included in table form

What else do I need to know?

Corporate transactions usually involve one party (the warrantor) providing warranties to another party concerning the company and its business, financial performance, prospects, assets, contracts, rights and liabilities. A breach of the warranties may result in a legal claim against the warrantor for damages for breach of contract.

The warrantor may wish to disclose specific events or circumstances as exceptions to certain warranties. The disclosure of these matters is intended to shield warrantor against a potential claim for breach of the particular warranties.  Instead of amending or qualifying the warranties themselves, the disclosures against specific warranties are set out in a separate letter prepared by the warrantor, known as a “Disclosure Letter”.

As an example in an investment transaction, the agreement may include a warranty that the target company has complied with all legal requirements in its business conduct.   If the founders, acting as warrantors, are aware of a failure by the company to comply with a specific legal requirement, they would disclose this as an exception to the warranty.  This is done by setting out a narrative of the circumstances of the breach, along with supporting documents, in the Disclosure Letter.  If the disclosure satisfies the defined requirement of “fair disclosure” in the investment agreement, it should shield the founders from a claim under the investment agreement for breach of this warranty regarding the disclosed non-compliance.

The warranties may explicitly require that certain facts or documents be included in the Disclosure Letter.  For instance, a warranty might require that the Disclosure Letter contains details and copies of all material contracts entered into by the target company.  Failure to disclose a material contract may result in a claim against the warrantors for breach of warranty if the omission causes loss to the investor(s).

Upon receiving disclosures during transaction negotiations and discussions on the draft Disclosure Letter, the investor(s) have several options:

  • to accept the disclosure, with the result that the investor(s) have no legal recourse if the disclosed matter leads to an actual liability or loss
  • to request specific indemnity cover from the warrantors in the investment agreement to cover the disclosed matter, under which the investor(s) may be able to recover any resulting liability or loss notwithstanding the disclosure
  • to renegotiate the transaction terms, such as adjusting the company’s pre-investment value, or hold back some investment until the risk of a liability or loss has expired in the future
  • to withdraw from the transaction entirely

What other documents are available?

For a disclosure letter for use in a share purchase transaction, see

For a disclosure letter for use in a business purchase transaction, see

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Updated by a lawyer on 04/11/2025

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