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.
Read moreA sale of goods contract template should be used if:
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.
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:
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):
The implied term as to goods being of satisfactory quality does not extend to any matter which makes them unsatisfactory:
Yes under UCTA, with certain exceptions and, for others, provided that the exclusion or restriction is reasonable.
For example:
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).
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:
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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Sample available