July 27, 2022
How-to

Sales contract guide for small businesses [free template for 2022]

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Sales contracts are a necessary part of any business. They protect the buyer and the seller and can help both parties avoid misunderstandings and legal issues down the road. But many people either don't know how to create a sales contract or feel intimidated by the process.

Our sales contract guide is designed to change that. Here, you'll find a simple explanation of what a sales contract is, plus a free template you can use for your business.

What is a sales contract?

A sales contract is a legally binding agreement between two parties (the buyer and the seller) that outlines the terms of a sale. The contract should include information like the price of the product or service being sold, the delivery date, and any warranties or guarantees.

Why do you need a sales contract?

A sales contract protects the buyer and the seller. In addition, it helps both parties avoid misunderstandings and legal issues down the road. For example, the contract can be used as evidence in court if there's a dispute.

A sales contract should include the following information:

  • The names and contact information of the buyer and the seller
  • A description of the product or service being sold
  • The price of the product or service
  • The delivery date
  • Any warranties or guarantees

Remember that every sales contract is different, and you may need to include additional information.

Types of sales contracts

There are many different types of sales contracts, each designed for a specific purpose. However, here are some of the most common types of sales contracts.

General sales contracts

A general sales contract is the most basic type. You can use this type of contract for any sale, from software to delivered services.

Conditional sales contracts

A conditional sales contract is used when the product being sold must meet certain conditions from the buyer before the sale is final.

For example, businesses might use a conditional sales contract to sell software that the seller retains ownership of until the buyer has made all payments.

International sales contracts

An international sales contract is used when the buyer and seller are located in different countries. This type of contract is often used for business-to-business sales.

Addendums

An addendum is a document added to a contract to make changes or additions. For example, if the product's price changes, you would create an addendum to reflect the new price.

Sales contract template and example

You can use this template for any type of sale. Just fill in the information below and have both parties sign the contract. You can also download this sales contract template as a PDF:

Sample sales contract

THIS SALES CONTRACT (the "Contract") is dated this ______ day of ______, ______. BETWEEN ______ (the "Seller") AND ______ (the "Buyer")

WHEREAS, the Seller wishes to provide ______ (the "Services") to the Buyer, and WHEREAS, the Buyer wishes to purchase the Services from the Seller;

WHEREAS, the Parties have read and agree to the terms and conditions set out below;

NOW THEREFORE, in consideration of the mutual undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

(a) "Product" means the product or products to be supplied by the Seller to the Buyer pursuant to this Contract;

(b) "Services" means the services to be supplied by the Seller to the Buyer pursuant to this Contract; and

(c) "Party" means the Seller or the Buyer, as applicable, and "Parties" means both the Seller and the Buyer.

2. SERVICES

The Seller shall provide the Services to the Buyer in accordance with this Contract.

3. DELIVERY

The Seller shall deliver the Product to the Buyer on ______.

4. PAYMENT
The Buyer shall pay the Seller the sum of ______ dollars ($______) for the Product pursuant to this Contract.

5. TERM

This Contract shall commence on the date when it is signed by the Parties and shall continue in force until ______.

6. GENERAL PROVISIONS

(a) This Contract constitutes the entire agreement between the Parties and supersedes all prior agreements, representations, or warranties, whether written or oral, with respect to its subject matter.

(b) This Contract may not be amended except in writing signed by both Parties.

(c) This Contract may be executed in any number of counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.

(d) Delivery of an executed counterpart of this Contract by facsimile, email, or other electronic means shall be effective as delivery of an original executed copy of this Contract for all purposes.

(e) The headings used in this Contract are for convenience only and shall have no interpretive value.

(f) This Contract shall be binding upon and enure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Seller's signature: __________

Buyer's signature: __________

Date: __________

To complete the contract, the seller and the buyer will need to fill in the following information:

  • The name of the product or service being sold
  • The date of delivery
  • The price of the product
  • The term of the contract
  • Their signatures

Once the contract is complete, both parties should keep a copy for their records.

Here is an example of a completed contract:

Sample sales contract

THIS SALES CONTRACT (the "Contract") is dated this 14thday of July, 2022. BETWEEN Your Service Provider, LLC (the "Seller") AND The Customer, Inc.(the "Buyer")

WHEREAS, the Seller wishes to provide SEO and Digital Marketing Consulting (the "Services") to the Buyer, and WHEREAS, the Buyer wishes to purchase the Services from the Seller;

WHEREAS, the Parties have read and agree to the terms and conditions set out below;

NOW THEREFORE, in consideration of the mutual undertakings contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:

1. DEFINITIONS

(a) "Product" means the product or products to be supplied by the Seller to the Buyer pursuant to this Contract;

(b) "Services" means the services to be supplied by the Seller to the Buyer pursuant to this Contract; and

(c) "Party" means the Seller or the Buyer, as applicable, and "Parties" means both the Seller and the Buyer.

2. SERVICES

The Seller shall provide the Services to the Buyer in accordance with this Contract.

3. DELIVERY

The Seller shall deliver the Product to the Buyer on August 14, 2022.

4. PAYMENT
The Buyer shall pay the Seller the sum of seven hundred dollars ($700.00) for the Product pursuant to this Contract.

5. TERM

This Contract shall commence on the date when it is signed by the Parties and shall continue in force until August 14, 2023.

6. GENERAL PROVISIONS

(a) This Contract constitutes the entire agreement between the Parties and supersedes all prior agreements, representations, or warranties, whether written or oral, with respect to its subject matter.

(b) This Contract may not be amended except in writing signed by both Parties.

(c) This Contract may be executed in any number of counterparts, each of which shall be an original, but all of which together constitute one and the same instrument.

(d) Delivery of an executed counterpart of this Contract by facsimile, email, or other electronic means shall be effective as delivery of an original executed copy of this Contract for all purposes.

(e) The headings used in this Contract are for convenience only and shall have no interpretive value.

(f) This Contract shall be binding upon and enure to the benefit of the Parties hereto and their respective successors and permitted assigns.

Seller's signature: Your Service Provider, LLC

Buyer's signature: The Customer, Inc.

Date:7/14/2022

Ramp can help with contract negotiations and more

If you're looking to streamline your contract negotiations, Ramp can help. With industry knowledge in vendor management, we can provide specialized services to make your life easier. Let us take care of the details so you can focus on what's important: running your business.

Additionally, we can provide guidance on what to look for in a contract, identify key terms and clauses, and help negotiate favorable terms for your business.

Thousands of businesses trust Ramp to help them with contract negotiations and more. So when you want to automate the tedious and time-consuming tasks for your business, Ramp is the answer.

Check out our interactive demo today.

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FAQs
What's the purpose of a sales contract?

A sales contract is a legally binding agreement between a buyer and a seller. It outlines the terms of the sale, including the price, quantity, and delivery date. The contract also sets out each party's obligations and rights.

A sales contract should be used whenever goods or services are sold. This protects both the buyer and the seller by clearly defining the terms of the transaction.

What is the difference between a sales contract and a sales agreement?

A sales contract is a legally binding agreement between a buyer and a seller. A sales agreement is a more general document that sets out the terms of the sale but is not legally binding.

Using a sales contract whenever possible is important, as it provides more protection for both parties. However, in some cases, a sales agreement may be sufficient.

Speak with an expert at Ramp to determine which document is right for your situation.

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