A sales contract can be anything from a small paper receipt to an extensive and very detailed House Purchase Contract. In general, these agreements will always contain specific and essential details.
- What the product or service is.
- How and when the product or service is to be provided.
- A cooling off or inspection period. (A set length of time that the buyer has to refuse or return the product/service.)
- A guarantee or warranty.
- Acceptable methods of payment and details about how/when payment is made.
Let’s look at these sections one by one to see the details that each would include.
1. The Product or Service
A description of the product or service and what is and isn’t included in its purchase. The description may consist of colors, size, shape, quantity, and type.
- How many items are included?
- What color does it come in?
- What type of product or service is it?
- What does it do?
2. Product or Service Delivery
This part of the contract will include the date or dates that the purchase will happen, how the product or service will be given to the buyer.
- Is it in stages or one transaction?
- Is delivery free or does it cost more?
- What date can delivery be expected?
- Is there a cutoff date or expiration date?
3. Cooling off/Inspection Period
Not all contracts include this part, especially in the case of buying food or meals – items that must be accepted or rejected immediately.
- Is the item delivered the correct type according to the description?
- Does the product or service work as described?
- Is the item damaged or faulty?
4. Guarantee or Warranties
A statement made by the seller that attests to the suitable use of the product and how long it can be expected to last.
- Many electrical items come with a guarantee on their mechanical parts.
- New homes may come with a one year warranty against any leaks or cracks.
Every product is different, and therefore each warranty and guarantee is unique. Using a product or service in a way that it was not designed could void/nullify the warranty.
5. Payment Arrangements
Naturally, this includes the cost of the item, but it can also include an agreed upon payment plan of installments or the method of payment.
- Will payment be made in full or in installments?
- How will the payments be made?
- Is a third-party (bank or other financial institution) providing the money for the purchase?
- Terms and conditions of payments.
- The steps that will be taken if there is a failure to pay on time.
No matter what sales contract you look at, however, most if not all of these points should be included. They serve to protect both the buyer and the seller from any disputes that may arise.
Why not try to write your own sales contract as a simple exercise to see what you need to include for any product you are thinking of buying or selling?