Contract and Commercial law

Essential Elements And Requirements For A Valid Sale Contract


A contract of sale is a legally binding agreement between a seller and a buyer for the transfer of property in exchange for a price. To ensure the validity of a sale contract, certain essential elements and general requirements must be met. This article explores the key elements and requirements necessary for a valid sale contract.

1.    General Requirements for the Formation of a Valid Contract

In general, a valid contract requires mutual agreement, intention to create legal relations, the capacity of the parties, and consideration. While it is not always necessary for a sale contract to be in writing, parties may agree to formalities such as a written and signed agreement to evidence the terms of their agreement. Some statutes, particularly those related to consumer protection and sales of land, may prescribe formalities as a requirement for contractual validity.

2.    Essential Elements of a Contract of Sale

To be considered a contract of sale, certain identifying features or essential elements must be present. These include the seller’s intention to sell and the buyer’s intention to buy, as well as agreement on the subject matter of the sale and the price to be paid.

2.1. Property to be Sold

The parties must agree on the specific property (merx or res vendita) to be sold. The property can be movable or immovable, corporeal or incorporeal, as long as it is capable of being sold. Former common-law restrictions on what property could be sold have been largely removed, although certain statutory restrictions may apply. It is possible for a person to sell another’s property (res aliena) as long as possession of the property is transferred to the buyer. However, if the seller misrepresented the ownership of the property, the buyer may have the right to rescind the contract or seek damages.

In the case of property under litigation, a valid contract for its sale may be concluded, but the buyer will be bound by the court’s decision.

2.1.1. Ascertained or Ascertainable Property

The property to be sold must be either ascertained (specifically identified) or ascertainable at the time of contract conclusion. It can be described by its specific characteristics, purpose, or correspondence to a sample provided. Generic goods can be sold based on their availability. However, if the description of the property is too vague to ascertain what has been sold, the contract is void.

2.1.2 Property Sold and its Comprehensiveness

There may be a distinction between accessories and auxiliaries or appurtenances of the principal property. Accessories become part of the thing sold, while auxiliaries or appurtenances augment the principal property without merging with it. Property law principles determine whether an item has acceded to another. This distinction has implications for the scope of the sale contract and what is included in the property sold.

2.2 Price

A purchase price must be agreed upon by the parties, either expressly or tacitly, for the sale contract to be valid. The price must be in money or partly in money. If the price consists entirely of something other than money, the contract is not a sale contract but may be an exchange or another type of contract. The currency used for the purchase price should be legal tender, although it does not necessarily have to be the currency of the country where payment is made. Parties must either stipulate the price in the contract or agree upon an external standard for price determination. The requirement of certainty in contractual terms applies to the price as well.


A valid sale contract requires the fulfilment of essential elements and general requirements for the formation of a valid contract. Parties must agree on the specific property to be sold and the price to be paid. The property must be ascertained or ascertainable at the time of contract conclusion, and the price must be certain. Additionally, other general contract requirements, such as mutual agreement, intention to create legal relations, the capacity of the parties, and consideration, must be met.

While this article provides a broad overview of the essential elements and requirements for a valid sale contract, it is important to note that contract law can be complex. Should you need assistance with any contract of sale contact a specialist at ShcoemanLaw. 

Johan De Lange
SchoemanLaw Inc

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