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Document Diaries: The Story of the Sales Agreement

Handshake deals between a buyer and seller can work like a charm, but they don’t enforce anything. Sales contracts are usually full of legal jargon but can help safeguard you from future problems. However, only when it is drafted correctly will it culminate into a successful contract.

The meet and greet

Carol Jenkins, 28, runs a wine distributor shop. She works with the sales team and is responsible for drafting the contracts to send across to her buyers, and restaurant chain owners. She needs to be extra careful when drafting such agreements to avoid problems down the road and ensure that her small organization is well-protected.

Learn how Carol Jenkins uses RevvSales to solve her sales document woes

Carol works hard in trying to maintain all forms of documents in one place. However, to maximize the profits of a specialty wine (popular at the moment), she needs to draft extensive Sales Agreements with the exact description of the goods delivered to these restaurant chains. She includes all the tiny details such as the type of wine, amount, delivery dates, and other relevant information that might make or break the deal. 

Ms. Jenkins then coordinates with the finance team to rule out payment methods in this agreement of sales. This includes how the payment will be processed (one-time, monthly, annually, or otherwise), whether the seller will require to make a specific payment method, repayment terms, and other details, including the risk of loss and warranty period (in whichever product it is applicable). She creates a new Sales Agreement for each customer, stretching out the time to close deals by days. 

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Why the need for a Sales Agreement?

A Sales Agreement or the Sale of Goods Agreement or Sales Contract is a written document exchanged between the buyer and the seller. Ms. Jenkins wanted to turn her company to start making profits. A Sales Agreement will ensure smooth sailing between the buyer and Carol’s company (seller), by addressing any hiccups that may come along the way. Furthermore, these agreements list everything from a small-scale purchase to large-scale contracts, eventually making Carol’s life easier. The following are some of the benefits of using a sales agreement.

Guarantees that the buyer will buy a specific amount of goodsGuarantees that the seller will provide for the said amount of goods
Guarantees the time of delivery of the said goodsGuarantees the supply of the goods
Guarantees the buyer will not back out of a promise after seller has devoted capital to produce the goodsGuarantees the buyer will be unaffected by market changes

Carol’s business heavily relies on Sales Agreements because it helps her understand the contractual rights and obligations should anything go wrong. The agreement defines the economic consequences, legal remedies, and protections available to her. It also acts as a strong foundation in an otherwise complicated transaction. Finally, it also protects the rights of buyers. It helps them identify, sell, and secure inventory at the best prices, maximizing profits. 

What are the major elements included in a simple Sales Agreement?

In the generic simple Sales Agreement, the following elements are included:

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  • Seller information – The full details of the seller – name, contact information, address, etc. 
  • Buyer information – The full name and contact information of the party buying the services
  • Description of the goods – One of the most critical terms included in the sales contract, it helps to identify the exact goods and services that the buyer wishes to purchase. To cite an instance, a simple Sales Agreement template will include details such as type of service, model number (when it comes to consumer goods), weight, color, size, amount, etc. 
  • Price – The total cost to be paid for the services, including installation charges and delivery charges (if any)
  • Payment – This is one of the most important aspects of a Sales Agreement. This section includes how the seller will invoice the buyer and how and when the buyer needs to pay
  • Warranties – This term clearly describes whether the seller is selling the goods as is, or will provide a guarantee on the condition of the goods 
  • Inspection – In Carol’s case, this element is important because it gives the buyer the right to inspect the goods within a stipulated time. 
  • Risk of loss – Whether it is a small shop or a large chain of restaurants, there are always risks involved. This term ensures which party is responsible for the costs if there are damages between the time the goods are shipped to the time the goods are delivered. For instance, if the seller carries the risk of loss, she will have to send the buyer another shipment of goods or pay the buyer damages. If the buyer carries the risk of loss, the buyer will have to pay for the goods, even if they are damaged during shipment. The seller can expressly disclaim or modify implied warranties under the uniform commercial code or UCC.

Some of the other elements that are included in a Sales Agreement are: 

  • Dispute resolution – In case of any disputes regarding the agreement, whether the contract will be resolved (between the parties) through arbitration, mediation, or through the courts 
  • Governing laws – If any specific laws will control the enforcement and interpretation of the agreement.
  • Amendments – How to change any terms and provisions mentioned in the agreement 
  • Assignment – If either party requires written permission to transfer rights under the agreement to another party
  • Notices – How both parties will communicate with each other 
  • Severability – The remainder of the agreement will still be valid if part of the deal is unenforceable

What are the challenges in drafting a Sales Contract?

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When drafting the sales contract, Carol takes note of all the terms included in the agreement. She does this in hopes that should a future issue arise, she and her organization will be well-protected. But warranting this might become a problem. Here’s why:

The other significant concerns when it comes to figuring out the Sales Agreement are:

  • The catch-22 of liability – Liability addresses the good’s risk of loss or damage and determines who is liable for the same at each point of the transaction. Each Sales Agreement must address the liability issue. Carol can transfer the buyer’s liability once the buyer has ownership through the agreement or when the buyer receives the goods or ships them. This becomes a significant deciding factor in the ongoing sale, especially if there are large-scale vendors involved. (Alternatively, you can read more about other such critical contract clauses and learn how to safeguard yourself and your business.)
  • Warranty, the uphill struggle – When it comes to a simple Sales Agreement, certain warranties regarding the goods may either apply or may not apply at all. These warranties are legally binding and assure the buyer that specific facts or conditions about the goods are true. However, making sure whether a warranty is applicable or the seller should opt for an ‘as is,’ depends on both the seller and the buyer. This ultimately can make or break the deal.

How does Revv help?

Taking the first step helps. Carol started with using Revv, a document management tool that came with Sales Agreement templates. She can now use this tool to draft, share, sign, and even track the seller’s activity on the sales contract itself.

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Here are some of the features of Revv that helped her resolve this matter in minutes:

  • Pre-designed, customizable templates – With Revv, Carol could use the available sales contract templates and edit those according to her requirements.
  • Notes @mentions and chat – Collaboration with different teams when working on a simple Sales Agreement is inevitable. Revv allows users to add notes, @mentions enabling the document owner to collaborate right on the document itself. 
  • Activity tab – This feature allows the user to track various stakeholders’ activity on the document. For example, if Carol has sent across a Sales Agreement contract to her buyer, she can see who has opened the document (and how many times), whether approved the document, rejected the document, etc. This helps her to identify bottlenecks in the process.
  • E-sign – Once she has drafted her document from a simple Sales Agreement template, she can now send it to her seller for e-signature
  • Folders – With all her sales agreement documents in one place, Carol can now easily track each deal’s progress. 

Want to minimize your efforts by using readymade simple sales agreement templates? Check out our other hundreds of templates available for download and make your document automation process seamless. 


Want to take the hard work out of drafting agreements? Try Revv’s agreement templates

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Aditi is a Product Consultant at Revv, a leading document management software company that provides document templates that help run your business. All about chasing sunsets, her thoughts collide with everything SaaS and oscillates between the midnight musings of a poet and her fav authors. Can be mostly found near dogs or in a cafe with a book.

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