If you’re in the business of either selling or buying merchandise, you should know the importance of a sales contract. This agreement isn’t as simple as a customer making a purchase at your store because this transaction has clear terms and you don’t need further clarification. In such a case, you won’t need a sales agreement contract. For more complex transactions, you need this document. There are many kinds of sales agreements, from general ones to more comprehensive ones that you might need in international transactions.
Table of Contents
Sales Contract Templates
What is a sales contract template?
You use sales contracts to outline the terms of a transaction between two parties – the seller and the buyer. It’s a formal agreement used to detail the goods, properties, or services that you trade for payment. You must keep this document for record-keeping and legal purposes. It identifies the following:
- Properties, services, or goods
- Other significant terms.
Using a sales contract ensures that the transaction occurs without any issues between you and the buyer. In the US, it’s a requirement to include all of the details of the transaction in writing if the sale is worth $500 and above. This makes the contract enforceable under the Uniform Commercial Code (UCC). Although this code isn’t a federal law, it serves as a model that all states have accepted and applied.
Sales Agreement Contracts
What to include?
Your sample sale agreement form becomes valid when there are signatures from both parties, along with all of the relevant information about the agreement. Here are the elements to include when creating this document:
- Details of the involved parties. This section isn’t extensive. Just make sure to should include the complete names, contact details, and addresses of the buyer and the seller. If the buyer or seller is a company, mention the authorized representative if applicable.
- A description of the property, goods, or services. Accurately describe the property, goods, or services you offer in the sales contract. Include important information like the name, size, model, weight, color, and other relevant details. Also, include the quantity if applicable. If you’re selling a type of service rather, this section will contain more information and details. You need to include the scope of work and how much time the service takes to complete.
- Agreed-upon price and payment terms. These details are very important components of the contract. Include the applicable taxes like GST here. Along with the price, outline the payment terms in this section. This usually includes the payment due date and the payment method. Also, mention the date at which the buyer receives their invoice. It’s also a good idea to include information related to late or non-payment. This information may come in the form of late payment fees and interest rates.
- Supply or delivery instructions. Provide an outline with details about where you will deliver the product, the date of delivery, and the delivery service you will use. Other details to include are the delivery costs and who shoulders those costs. It’s also recommended to include a statement that explains what happens if delivery becomes impossible due to causes that are out of your control.
- Warranty details. Offering a warranty for your services or goods is important for yourself and your buyer. Generally, you would discuss the warranty in more detail through a separate document. But you should still include the basic details of the warranty in your contract. You should also know the difference between an expressed and implied warranty. The former is a comprehensive statement from you about the product’s quality while the latter is an unwritten guarantee that the goods you’re selling meet specific quality standards. Warranty information is important as it clearly defines the conditions without depending on implied warranties.
- Inspection period. Also called the Return or Refund Policy, this section provides a set period of time for the buyer to check the product they received. This ensures that what they receive meets the quality they expect. Including this period in your document protects you against customers who want to return products after an unreasonable amount of time.
- Confidentiality clauses. If your transaction includes the transfer of confidential or sensitive information, it’s highly recommended to include a confidentiality clause. This serves as a safeguard against the unauthorized release of the information you sent to the buyer.
- Details about contract breaches. Include details about what happens if either party breaches the terms of the agreement. Also, provide an outline of when either of you can terminate the contract, along with any actions you should use as a recourse to recover your losses. You can also mention a severability clause. This is a statement that details how the other parts of the contract stay valid even if part of the contract gets invalided or becomes unenforceable.
Sales Contracts Samples
Why do you need this document?
Having a sales contract ensures that your business can move forward as it provides a guarantee to you and your buyer that the services or products will get transferred in exchange for an agreed-upon amount of money. This is why almost all business owners use sales agreements or contracts when working with partners, clients, and more. You need this document to:
- Provide relevant details about your transaction. With a sales contract between you and your buyer, you both have the assurance of a transparent transaction as defined by the terms and conditions in the document. This includes all of the details of every sale you make.
- Prevent miscommunication. After coming to an agreement on the terms, you will both have access to the relevant information you have discussed to prevent any miscommunication or conflict.
- Provide legal backup. You can both get protection if there is any disagreement between you. This is the most important reason why you need this document.
Sale Agreement Forms
How do you write a sales contract?
The preparation of a sales contract or buyer seller agreement is one of the most crucial steps in the process of sales. You must make sure that you define the customer’s needs clearly, you have included the agreed-upon details, you have established the terms, and addressed all outstanding issues. If you can accomplish these objectives effectively, your contract will be very effective. Here are the steps to follow when creating this document:
Clarify the needs of your customer
The contract serves as an agreement between yourself and the buyer about the provision of a service or product. To create an effective document, make sure to clarify exactly what your buyer needs. You shouldn’t prepare the contract without finding out in advance exactly what your buyer needs. Before you start to make the contract, answer these questions:
- What is your customer’s biggest need at the moment?
- What is the budget of your customer?
- Have you received feedback from the key decision-makers in your business?
- Do the challenges and needs of your customer align with the products or services you offer?
Come up with a solution that you both agree with
One of your most important duties as a salesperson is to offer solutions that will help alleviate your customer’s pain points or problems. After finding out about their needs, you should come up with a solution that you both agree with, one that suits their specific situation.
Often, the best solutions are those that address the needs of your customer directly. These are better compared to simply trying to make a sale. It’s worth taking your time to make sure that both you and your customer agree with the solution you offer.
Pointing out negatives can often feel counterintuitive but doing this ensures that your customer gains awareness of any obligations or drawbacks that some proposed solutions come with. It can also save you a lot of effort and time later when these issues surface.
Establish the terms
After you and your customer have agreed on the solution that provides what they need, it’s time to establish the most important details that need ironing out. These details are very important because they define your work so you can deliver the solution that you promised.
This part of the process focuses on creating expectations and managing those expectations. It is here where you specifically establish what you provide, what your customer pay, and the timeline, if applicable. When creating the terms, include the following key elements:
- Deliverables. These are the specific products or services that you will provide your customers. This may include products like new equipment or a service like building a website for your customer. It can even include a combination of both. For instance, if you promised to install a new HVAC system for your customer, the components of that system are your deliverables, along with the labor involved in installing those components. If you’re a service-based business, establishing exactly what you need to is very important. For example, if you’re assisting a small business in creating a marketing campaign. You must use clear terms to specify exactly what you will do and what the final results will be. Doing this task eliminates confusion while reducing the likelihood of having issues surfacing up later because of miscommunication.
- Payment Terms. You must define the amount your customer should pay you under the sales contract. It’s also important to include other payment-related details. For instance, will you require the payment upfront and in full or will you allow the customer to pay a deposit, then pay the balance in installments? The payment method you decide on may vary and it depends on several factors. No matter what you decide, you must put it in writing so you and your customers can agree on the payment terms.
- Timelines. A timeline can be as simple as setting the date to deliver a product or as complicated as in situations where the sales involve different steps throughout the process. Make sure that you and your customer talk about the steps to establish a timeline that’s mutually beneficial. If you’re creating a website, for instance, you may establish milestones that allow your client to review your progress and get their approval before you move forward.
Provide your customer with a review proposal
It’s highly recommended that before you submit the final sales agreement or contract, you should first incorporate all of the solutions, terms, and terms you have discussed with your customer. Include all of these details in a sales proposal document. Doing this gives you and your customers the chance to make sure you both have an understanding of the deliverables, timeline, costs, and expectations associated with the transaction.
Another advantage of creating a review proposal is that it’s not intended as an official document. It’s less costly to create and make alterations to. This document is especially important if you’re selling complex products or service-based projects long-term.
For instance, if you have a marketing agency business where you work on a contract for marketing services every month. A proposal helps you outline the details before you involve a lawyer who can help you capture the right information in your final contract.
Revise before finalizing your document
After preparing the review proposal for your customer, give them some time to review all of the information in the document. Doing this helps you make sure that the proposal reflects the customer’s needs and the solutions you agreed upon.
Defining this review upfront helps you make a point to follow up so that you won’t encounter any issues in the future. It will also ensure that the sales process will continue moving forward after you create your sales contract template. The key is to provide clarity from the beginning in terms of your anticipation to move to the next step.
Use a template to create your document
Since a sales contract is a legal document, you can download and use a template and fill in the necessary details based on your review proposal. Even the most complex sales transactions have downloadable templates you can use. This is because the legal language doesn’t change, only the details of each sale. Using a template when creating your contract makes life easier as you only need to input the details that apply to your transaction.