Commercial Sales Contracts: A Comprehensive Guide
Market
Definition
A market is a physical location where sellers and potential buyers meet. It is the point where supply and demand converge.
Structure
- People: Driven by natural or legal necessities, individuals seek satisfaction within the market.
- Resources: These are the means to satisfy needs.
- Capacity: This refers to the potential for legal action within the market.
Levels
- Potential Market: The total number of buyers sensitive to the supply of a specific product during a particular time period.
- Target Market: The number of buyers a company aims to reach with its commercial offering within a defined time frame.
- Current Market: The specific individuals who purchase a particular product from a specific company within a given time.
Matching the current and target markets signifies the achievement of business objectives.
Parameters of Market Structure
- Economic indicators
- Social dynamics
- Income distribution
- Propensity to spend and save
- Commercial trends
Central Areas
Geographical locations where the supply of goods and commercial services is concentrated.
Areas of Influence
Areas where demand is concentrated, fueling commercial activity.
Commercial activity in physical centers, such as malls, is driven by two factors: the supply of goods and services and the tendency to travel.
Practical Applications
- Sales forecasting for malls and shopping areas
- Defining logistics networks for efficient distribution
- Strategic location of points of sale
- Determining suitable surface areas for shops and selling points
- Parking size and design
- Sales routes for vendors
- Allocation of sales areas to sales teams
Most Frequent Causes of Contract Extinction
Compliance
The contract is carried out from beginning to end, with total compliance by all parties.
Termination
One party requests the termination of a validly entered contract due to a lesion of interest. The effect of rescission is the return of merchandise or payments covered by the contract.
Breach of Obligations
One party, upon the failure of the other, decides to terminate the contract. Specific clauses within the contract usually define what situations constitute non-compliance and the imposed form of resolution. This type of extinction is known as unilateral.
Mutual Consent
Both parties, by mutual agreement, create a new contract and cancel the effects of the first.
Novation
The signing of new obligations that replace earlier ones, extinguishing or modifying them.
Remission
Forgiveness of a debt.
Market Typology
Type of Buyer
- Consumer Market: Meeting needs for goods or services. Total demand is called final demand.
- Industrial Market: Acquiring goods and services for the production process.
- Institutional Market: Purchases by non-profit organizations. These two markets represent derived demand.
Level of Competition
- Supply Monopoly: One seller, many buyers, no competition.
- Demand Monopoly: One buyer and several sellers. Absence of competition in demand.
- Oligopoly: Few sellers and many buyers for a specific product.
- Demand Oligopoly: Few sellers, many buyers. Buyers dominate the market.
- Perfect Competition: Many buyers and sellers competing with a homogeneous product.
- Monopolistic Competition: Similar to perfect competition but with a differentiated product.
Commercial Sales Contract
Definition
A contract for the sale of movable goods, intended for resale, either in the same form they were purchased or in a different form, with the aim of profiting from the resale.
Key Characteristics
- Intention of resale or profit
- Purchased product can be modified, changed in nature, or incorporated into a more complex product before resale
- The product must be movable property
Elements of a Commercial Sales Contract
Personal Elements
- Seller: A natural or legal person capable of acting in a civil capacity, delivering the good and charging a price.
- Buyer: An individual with the civil capacity to act and receive the good upon payment.
Actual Elements
- The Good: The object of the contract, usually movable property intended for resale.
- Price: The amount of money the seller receives from the buyer in exchange for the good.
- Terms & Conditions: Time, place, and manner of delivery of the goods and payment of the price.
Formal Elements
- Form: Oral or written. Commercial sales contracts typically follow normal commercial procedures and are in writing.
The Commercial Sale Process
The process involves the following steps:
- Statement of Intent: The buyer expresses their desire to purchase the good.
- Negotiation: The buyer and seller agree on the terms of the sale, including price, quantity, and delivery.
- Contract Formation: The buyer and seller formalize the agreement in a written contract.
- Performance: The seller delivers the good and the buyer makes payment.
Obligations of the Parties
Buyer
- Pay the agreed-upon price on time and in the agreed-upon manner.
- Receive the good and take charge if the contract is fulfilled.
Seller
- Deliver the good in the agreed-upon timeframe.
- Deliver the good in the agreed-upon place and manner.
- Guarantee the legal possession of the good to the buyer.
- Guarantee against hidden defects.
Consequences of Non-Compliance
Seller
If the seller fails to meet their obligations, the buyer may terminate the contract and request compensation.
Buyer
If the buyer fails to pay on time and in the agreed-upon manner, the seller may require interest payments. If the buyer does not receive the goods, the seller may deposit them with the court.
Termination of Obligations
Beyond the consequences of non-compliance, both parties may agree to cancel or renew the contract, potentially changing the terms due to a breach of contract elements.
Model Commercial Sales Contract
A typical commercial sales contract includes the following elements:
- Place and date the contract is made
- Identification of the parties (buyer and seller)
- Manifestation of the parties’ determination
- Clauses relating to the real elements (description of the good, price, terms)
- Closing (specifying the courts that will handle any disputes)