A standard sales agreement is a written contract used to specify, outline, and clarify the terms of a transaction between a buyer and a seller. It helps both parties understand the details of the agreement, which can minimize the chances of a dispute in the future.
A sales agreement is a starting point and a guide to help you and your attorney create a contract that covers all the terms and conditions that will be relevant to your business transactions. A sales agreement may be referred to as a sales contract, buyer and seller agreement, sale of goods contract, purchase and sale agreement, or purchase agreement.
When creating a sales agreement, these basic elements need to be included:
Contracts that sell goods priced at $500 or more must be in writing to be enforceable, according to the Statute of Frauds. For some sales contracts, the buyer has a statutory right to cancel the contract until midnight of the third business day after the sale.
For more information about the option to cancel the contract during the designated time frame, check the laws for your state and the Federal Trade Commission.
A sales agreement and a bill of sale are similar, although a sales agreement can provide more detail and options in payment plans. It also provides warranties on the goods/product.
Sales agreements allow both parties flexibility in arranging terms that allow for goods to be secured before they are purchased. This can take place prior to the agreement being completed.
It is also mandated that sales agreements must be in compliance with state Uniform Commercial Code (UCC) regulations, which are currently effective in every state with the exception of Louisiana. For retail purchases over $500, UCC regulations require a written sales agreement, but a business owner may choose to include a written agreement with a sales receipt on retail purchases.
A bill of sale is a simpler form than a sales agreement. It is generally used as evidence to prove transference of ownership from one party to another.
Regardless of the type of business you operate, it's important to have a written agreement to make sure your business runs smoothly until the goods/services and payment for the goods has been exchanged. It also ensures both parties have a clear understanding of what steps to take if there are any problems with the transaction.
A sales agreement provides a foundation and framework for all the steps in a complicated process. Without a sales agreement, the risk of not understanding contractual rights and obligations increases.
If you need help with a standard sales agreement, you can post your legal need on UpCounsel's marketplace. Upcounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.