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Sales Agreement

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Frequently Asked Questions
What is a Sales Agreement?A Sales Agreement is a detailed contract outlining the terms of sale of goods and services to a third party. What is the difference between a Sales Agreement and a Bill of Sale?A Sales Agreement is a detailed sales contract. It is commonly used when selling new goods and services or items that require delivery.

In contrast, a Bill of Sale is a simple contract that is used to provide evidence that goods have been sold. It is commonly used for straightforward transactions, such as when selling a used vehicle.
Why can't I use a Sales Agreement for a real estate transaction?There are a specific set of rules you must follow when selling real estate. Use our Real Estate Purchase Agreement when transferring real estate.

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Sales Agreement

THIS SALES AGREEMENT (the "Agreement") dated this _____ day of _____________, 20____


______________ of ________________________________________________________________________________
(the 'Seller')


- AND -

______________ of ________________________________________________________________________________
(the 'Buyer')


IN CONSIDERATION OF THE COVENANTS and agreements contained in this Sales Agreement the parties to this Agreement agree as follows:

  1. Sale of Goods
  2. The Seller will sell, transfer and deliver to the Buyer on or before the _____ day of _____________, 20____, the following goods (the 'Goods'):
  3. Purchase Price
  4. The Buyer will accept the Goods and pay for the Goods with the sum of ________________________ ($0) USD, paid by cash as required in clause 4 of this Agreement.
  5. The Seller and the Buyer both acknowledge the sufficiency of this consideration. In addition to the purchase price specified in this Agreement, the amount of any present or future sales, use, excise or similar tax applicable to the sale of the Goods will be paid by the Buyer, or alternatively, the Buyer will provide the Seller with a tax exemption certificate acceptable to the applicable taxing authorities.
  6. The Buyer will make payment for the Goods at the time when, and at the place where, the Goods are received by the Buyer or, in the alternative, when any document of title or registrable bill of sale, bearing any necessary endorsement, is tendered to the Buyer.
  7. Delivery of Goods
  8. The Goods will be deemed received by the Buyer when delivered to the Buyer at ________________________________________________________________________________. The method of shipment will be within the discretion of the Buyer. However, the Seller will only be responsible for the lesser of truck freight or rail freight to the Buyer.
  9. Risk of Loss
  10. Risk of loss will be on the Buyer from the time of delivery to the carrier. The Buyer will provide, at its expense, insurance on the Goods insuring the Seller's and the Buyer's interest as they appear, until payment in full to the Seller.
  11. Warranties
  12. THE GOODS ARE SOLD 'AS IS' AND THE SELLER EXPRESSLY DISCLAIMS ALL WARRANTIES, WHETHER EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO, ANY IMPLIED WARRANTY OF MERCHANTABILITY OR FITNESS FOR A PARTICULAR PURPOSE. The Seller does not assume, or authorize any other person to assume on the behalf of the Seller, any liability in connection with the sale of the Goods. The Seller's above disclaimer of warranties does not, in any way, affect the terms of any applicable warranties from the manufacturer of the Goods.
  13. The Buyer has been given the opportunity to inspect the Goods or to have it inspected and the Buyer has accepted the Goods in its existing condition. Further, the Seller disclaims any warranty as to the condition of the Goods.
  14. Title
  15. Title to the Goods will remain with the Seller until delivery and actual receipt of the Goods by the Buyer or, in the alternative, the Seller delivers a document of title or registrable Bill of Sale of the Goods, bearing any necessary endorsement, to the Buyer.
  16. Security Interest
  17. The Seller retains a security interest in the Goods until paid in full.
  18. Inspection
  19. Inspection will be made by the Buyer at the time and place of delivery.
  20. Claims
  21. The Buyer's failure to give notice of any claim within 10 days from the date of delivery will constitute an unqualified acceptance of the Goods and a waiver by the Buyer of all claims with respect to the Goods.
  22. Excuse for Delay or Failure to Perform
  23. The Seller will not be liable in any way for any delay, non-delivery or default in shipment due to labor disputes, transportation shortage, delays in receipt of material, priorities, fires, accidents and other causes beyond the control of the Seller or its suppliers. If the Seller, in its sole judgment, will be prevented directly or indirectly, on account of any cause beyond its control, from delivering the Goods at the time specified or within one month after the date of this Agreement, then the Seller will have the right to terminate this Agreement by notice in writing to the Buyer, which notice will be accompanied by full refund of all sums paid by the Buyer pursuant to this Agreement.
  24. Remedies
  25. The Buyer's exclusive remedy and the Seller's limit of liability for any and all losses or damages resulting from defective goods or from any other cause will be for the purchase price of the particular delivery with respect to which losses or damages are claimed, plus any transportation charges actually paid by the Buyer.
  26. Cancellation
  27. The Seller reserves the right to cancel this Agreement:
    1. if the Buyer fails to pay for any shipment when due;
    2. in the event of the Buyer's insolvency or bankruptcy; or
    3. if the Seller deems that its prospect of payment is impaired.
  28. Notices
  29. Any notice to be given or document to be delivered to either the Seller or Buyer pursuant to this Agreement will be sufficient if delivered personally or sent by prepaid registered mail to the address specified below. Any written notice or delivery of documents will have been given, made and received on the day of delivery if delivered personally, or on the third (3rd) consecutive business day next following the date of mailing if sent by prepaid registered mail:

    SELLER: ______________, ________________________________________________________________________________

    BUYER: ______________, ________________________________________________________________________________

  30. General Provisions
  31. Headings are inserted for the convenience only and are not to be considered when interpreting this Agreement. Words in the singular mean and include the plural and vice versa. Words in the masculine mean and include the feminine and vice versa.
  32. All representations and warranties of the Seller contained in this Agreement will survive the closing of this Agreement.
  33. The Buyer may not assign its right or delegate its performance under this Agreement without the prior written consent of the Seller, and any attempted assignment or delegation without such consent will be void. An assignment would change the duty imposed by this Agreement, would increase the burden or risk involved and would impair the chance of obtaining performance or payment.
  34. This Agreement cannot be modified in any way except in writing signed by all the parties to this Agreement.
  35. This Agreement will be governed by and construed in accordance with the laws of the Commonwealth of Virginia, including the Virginia Uniform Commercial Code and the Seller and the Buyer hereby attorn to the jurisdiction of the Courts of the Commonwealth of Virginia
  36. Except where otherwise stated in this Agreement, all terms employed in this Agreement will have the same definition as set forth in the Uniform Commercial Code in effect in the Commonwealth of Virginia on the date of execution of this Agreement.
  37. If any clause of this Agreement is held unconscionable by any court of competent jurisdiction, arbitration panel or other official finder of fact, the clause will be deleted from this Agreement and the balance of this Agreement will remain in full force and effect.
  38. This Agreement will inure to the benefit of and be binding upon the Seller and the Buyer and their respective successors and assigns.
  39. This Agreement may be executed in counterparts. Facsimile signatures are binding and are considered to be original signatures.
  40. Time is of the essence in this Agreement.
  41. This Agreement constitutes the entire agreement between the parties and there are no further items or provisions, either oral or otherwise. The Buyer acknowledges that it has not relied upon any representations of the Seller as to prospective performance of the Goods, but has relied upon its own inspection and investigation of the subject matter.

IN WITNESS WHEREOF the parties have executed this Sales Agreement on this _____ day of _____________, 20____.


______________ (Seller)


(the 'Seller')


______________ (Buyer)


(the 'Buyer')

Sales Agreement

What is a Sales Agreement?

A Sales Agreement, also known as a Sales Contract or Sales of Goods Contract, is used to specify the terms of a transaction between two parties.

What can I use a Sales Agreement for?

You can use a Sales Agreement for purchasing/selling:

  • Goods: a physical item or possession (e.g. computer, air conditioner, car, exercise equipment, animals, etc.)
  • Services: performing duties in exchange for compensation (e.g. installing a dishwasher). If services are the only thing being provided, it is recommended you use LawDepot's Service Agreement
  • Goods and Services: the purchase of both a physical item as well as supplying aid (e.g. a computer and installing the computer)

When creating your Sales Agreement, clearly describe the item and/or service. This should include a physical description and the quantity being sold.

Who are the parties in a Sales Agreement?

Buyer: the individual or corporation purchasing a good or service from a seller

Seller: the individual or corporation selling a good or service

How do I determine the payment details in this Sales Agreement?

In a service contract, you will need to determine a payment plan. Here are the decisions you need to make:

Payment type is how the buyer intends to pay the seller. Payment can come in the form of:

  • Cash
  • Certified check
  • Promissory note
  • Bank draft
  • PayPal
  • Email transfer, etc.

The seller should provide a receipt to the buyer for transactions involving cash.

Deposit is a specified amount of money that a buyer gives to a seller as security that they will follow through on the transaction. If the buyer chooses to purchase, the deposit will go towards the purchase price. The deposit can be refundable or nonrefundable, meaning that either the deposit is returned to the buyer or kept by the seller if the deal does not go through.

It is important to include payment due dates for both the payment itself as well as the deposit in the Sales Agreement, if applicable, to make the transaction details clear.

Will the goods be delivered?

You may wish to include terms regarding where the goods will be delivered. This can be at the buyer's address, the seller's address, or at another specified location. The seller can be compensated after the buyer has received the goods, the seller has shipped them, or a Bill of Sale has been created.

What's the difference between a Sales Agreement and a Bill of Sale?

While a Sales Agreement and Bill of Sale have similar purposes, a Sales Agreement offers a more detailed payment plan and provides warranties on the item. It also allows both parties more flexibility prior to completing the agreement by arranging terms to secure goods before they are purchased.

A Bill of Sale is a form evidencing that an item's ownership has been transferred from one party to another. It can be used as part of a Sales Agreement to prove that the goods officially changed hands.

What do the terms liability, warranty, and "as is" mean in a Sales Agreement?

Liability addresses the goods' risk of loss or damage and determines who is responsible for the item at each point of the transaction. Liability can be transferred to the buyer once:

  • The buyer has ownership through a Sales Agreement
  • The buyer receives the goods
  • The seller ships the goods

Warranty refers to the guarantee that a seller makes about the quality and condition of goods.

Here are some of the guarantees a seller can make regarding an item:

  • They own it (e.g. the seller purchased the car from a dealership).
  • The item has no claims or loans against it (e.g. there are no outstanding liens or payments on a vehicle).
  • The goods are fit for use (e.g. the motorcycle is fit for driving).
  • The item does not infringe on patents or trademarks (e.g. the seller's invention is not a replica of someone else's patented design).

"As is" refers to when a seller offers no warranties on an item, which means they do not guarantee the quality of the goods to the buyer, and the buyer agrees. This condition only works if the seller has not purposely hidden any flaws.

Related Documents:

  • Bill of Sale: provides a record of the sale of an item to a buyer
  • Real Estate Purchase Agreement: used for the sale and purchase of real estate property
  • Purchase of Business Agreement: used for the sale or transfer of ownership of a business from a seller to a buyer
  • Service Agreement: describes the terms of a service provided by a one party to another in exchange for compensation
  • Promissory Note: a contract between a lender and borrower where the borrower promises to pay back the lender according to a payment plan

Frequently Asked Questions:

Sales Agreement FAQ
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