Sales of Goods Agreement Builder

Sales of Goods Agreements — Complete Guide

What is a Sales of Goods Agreement?

A Sales of Goods Agreement is a legally binding contract between a seller and a buyer that records the terms on which goods are sold — price, quantity, specifications, delivery, payment, warranties and risk. In the UAE it is the primary commercial contract used for one-off transactions, recurring supply, distribution and cross-border trade.

When do businesses need one?

Whenever a business sells goods for value it should record the terms in writing. A written Sales of Goods Agreement protects both parties by making the commercial deal, delivery obligations and remedies clear. UAE banks, customs authorities and courts routinely ask to see the sales contract for high-value or cross-border transactions, and disputes are almost always easier to resolve when the terms have been documented up-front.

Key clauses included

• Parties and authority to sign
• Description of the goods, quantity, specifications and quality
• Price, currency, VAT treatment and additional charges
• Delivery, Incoterms, risk and title transfer
• Payment terms and default interest
• Inspection, acceptance and non-conformity procedures
• Warranty period, returns and remedies
• Force majeure, confidentiality and IP
• Termination, dispute resolution and applicable law

Domestic vs international sales agreements

Domestic UAE sales agreements are typically governed by UAE commercial law (Federal Decree-Law No. 50 of 2022 on Commercial Transactions) and use AED as the contract currency. International sales agreements often add Incoterms (EXW, FOB, CIF, DDP), customs clearance responsibilities, and — unless expressly excluded — apply the United Nations Convention on Contracts for the International Sale of Goods (CISG). Currency, tax treatment and dispute resolution should be tailored to the destination market.

Common mistakes to avoid

• Ambiguous descriptions of the goods and quantity
• Silent on Incoterms for cross-border transactions
• No inspection or acceptance mechanism
• No cap on liability and no force-majeure clause
• Missing dispute resolution and governing-law clauses
• Using the wrong entity name — signatories should match the trade licence

Why a written agreement matters

A written Sales of Goods Agreement is the single most useful document in any commercial dispute. It fixes the commercial deal in writing, records what each Party owes the other, and provides UAE courts, arbitrators and banks with a clear reference. For high-value or recurring transactions, always consider a professional legal review before signing.

This content is educational and not legal advice. For binding advice on your specific transaction, consult a UAE-licensed legal advisor.