Sale of goods clauses in a contract

Ownership, risk and shipping

Retention of title keeps ownership with the seller until the price is paid, and in Australia it usually needs registering on the PPSR to hold up if the buyer becomes insolvent. Passing of risk decides when the buyer starts carrying the loss if goods are lost or damaged, which does not have to be the moment ownership passes. Incoterms are standard trade terms that set delivery points, costs and risk for shipped goods, and the page explains how to name one correctly. Read retention of title and passing of risk together, because separating ownership from risk is common and easy to get wrong.

When the goods arrive

Inspection and rejection gives the buyer a set time to check goods and reject those that do not match the contract. Returns and refunds sets a seller's own returns policy on top of the law. Consumer guarantees explains the rights the Australian Consumer Law gives consumers, which a contract cannot exclude. As is clauses try to sell goods without promises about their condition, and the page says plainly where that works, in some business sales and private sales, and where it is void against a consumer.

Trade and supply arrangements

Minimum order quantity fixes the smallest order a supplier will accept, and exclusive distribution gives one distributor the sole right to sell a product in a territory, which can raise competition law questions if the terms go too far. Product recall sets out who does what if goods must be withdrawn for safety reasons, including who pays and who talks to the regulator. These three matter most in ongoing supply relationships rather than one off sales. Each page carries sample wording, variants and negotiation points, and none of it is legal advice.

Every page in this collection

• As is clause: selling goods in their current condition

  A buyer who drives away in a used car and finds a failing gearbox a week later looks first at what the paperwork said about condition. Whether an as is clause protects the seller depends less on its wording than on who sold the goods, how they were sold and who bought them.

• Consumer guarantees clause under the Australian Consumer Law

  A retailer's warranty document is where consumer law mistakes are most visible, because a promise of 12 months of repairs can read as though it replaces rights the law gives for longer. The clause has to present the business's own warranty as extra to the guarantees, never as a substitute for them.

• Exclusive distribution clause: one territory, one distributor

  Exclusivity is what a distributor pays for with its marketing spend, warehouse and sales team, so this clause is usually the commercial heart of the agreement. The word exclusive settles very little on its own, which is why disputes tend to start over direct sales, online orders and missed targets.

• Incoterms clause: naming the delivery point, risk and freight

  Three letters and a place name can decide who pays for a container lost at sea, so the clause is short but carries real money. Most disputes come from a vague named place or an outdated version of the rules rather than from the rule itself.

• Inspection of goods clause: checking and rejecting a delivery

  Goods left unopened on a loading dock for a month are hard to send back, because the longer a buyer keeps them the more the law reads silence as acceptance. A clause with a clear window, a notice method and a rule for hidden defects turns that uncertainty into a date on the calendar.

• Minimum order quantity clause: the smallest order a supplier accepts

  Small orders cost a manufacturer the same setup, picking and freight as large ones, so without a floor a buyer can quietly turn a wholesale account into a retail one. The clause protects the buyer too, because a minimum written into the contract cannot be raised halfway through a season by an email.

• Passing of risk clause: whose loss is it

  When a pallet of tiles is crushed by a forklift, the only question anyone asks is whose loss it is. The answer depends on a moment in time, and a clause that names that moment and the insurance that goes with it saves an argument between two parties who each thought the other was covered.

• Product recall clause: who decides, who runs it and who pays

  A recall is the one moment in a supply relationship where hours matter and each party holds half the information, the supplier knowing the fault and the retailer knowing the customers. Agreeing the sequence before anything goes wrong stops two businesses arguing about cost while unsafe stock stays on the shelf.

• Retention of title clause and the PPSR

  Retention of title clauses are often well written and never registered, which leaves the supplier as an unsecured creditor on the day it matters most. The clause and the registration work as a pair, so the timing of the registration deserves as much care as the wording.

• Returns and refunds clause: change of mind and faulty goods

  Most returns arguments at a shop counter start with a policy that mixes two different things: the goodwill a business offers to customers who change their minds, and the remedies the law requires when goods are faulty. A clause that keeps them apart lets staff answer quickly without misstating anyone's rights.