Sale of Fungible Goods Agreement
(Delivery in Installments)

Summary

This sale of fungible goods agreement is a sales agreement for fungible goods which will be delivered to the purchaser in installments. This template includes practical guidance, drafting notes, and alternate clauses. Fungible goods are those that are generally deemed interchangeable for commercial purposes and that have identical or nearly identical properties. They are of such a nature that they may be replaced by or substituted with other goods of a like quality, such as oil, precious metals, securities, or money. As defined in the Uniform Commercial Code (UCC), the term "fungible goods" means (1) goods of which any unit, by nature or by trade usage, is the equivalent of any other like unit, or (2) goods that by agreement are treated as fungible. U.C.C. § 1-201(18). This template provides for the sale of fungible goods in installments. Installment sales agreements require or authorize the delivery of goods in separate lots to be separately accepted, even though the contract contains a clause "each delivery is a separate contract" or its equivalent. U.C.C. § 2-612. Such contracts involve certain rights and requirements that are unique to installment sales, including the parties' rights with respect to rejecting a non-conforming installment. Variations of this agreement may be made to suit the particular sales transaction. For additional guidance and resources, see Contracts for Goods or Services, Installment Contracts for the Sale of Goods under the UCC, Sale of Goods Agreements: Avoiding Common Pitfalls, Drafting a Sale of Goods Agreement Checklist, and Installment Contracts for the Sale of Goods under the UCC, Supply of Goods Resource Kit.