A Sales Agreement is used to document the sale and purchase of services or goods between a buyer and a seller. It includes information about both parties, payment details, and whether or not warranties will be included in relation to the goods or services.
The buyer and seller in a Sales Agreement may either be individuals or corporations.
A Sales Agreement is also known as a:
- Purchase Agreement
- Sales Contract
Who needs a Sales Agreement?
Anyone who is purchasing or selling goods or services to another party where the seller will make warranties should have a Sales Agreement in order to document the terms of the transaction.
If you wish to sell or purchase an item “as-is”, with no warranties on the condition of the goods, you may wish to use a Bill of Sale.
What is the difference between goods and services?
Goods in a Sales Agreement are physical items, such as computers, vehicles, livestock, or smaller housewares.
Services are when the seller will be providing a service to the buyer, such as installing a computer or mowing a lawn.
Goods and services together are when a buyer will be purchasing both an item and a service from the seller. For example, a computer and its installation.
How does payment and liability work in a Sales Agreement?
Payment from a buyer to a seller can be made in a variety of ways. Some of your options include:
- Cheque
- Cash
- Bank draft
If the seller agrees, you may also pay using a Promissory Note, and it is up to them if a deposit will be required.
The risk of loss of the item may be transferred from the seller to the buyer either when the buyer receives the good or when the seller ships the item(s) to the address provided by the buyer.
What is "assignment" in a Sales Agreement?
Assignment is when either the buyer or seller choose to have someone else, such as a friend, family member, or co-worker, sell or purchase the goods in their stead.
In your Sales Agreement, you may choose to only allow this by having written consent from the actual buyer or seller who has assigned another party to act for them.
