What is a Sales Agreement?
When should I use a Sales Agreement?
Use this Sales Agreement when you:
are supplying goods to a business
are supplying goods with or without complementary services
are supplying either goods to specification or standard goods
want a formal agreement for sales to a specific customer, rather than general terms and conditions
If you want to sell personal goods (ie you are an individual (not a business) who wants to sell goods to another individual), use a Sale of personal goods contract instead of this Sales Agreement.
SALE OF GOODS AGREEMENT
This Agreement is made on____________________________________________(date).
- These words and phrases have defined meanings:
Agreement this document and the Contracts, including any amendments; Consumer an individual acting for purposes which are wholly or mainly outside their trade, business, craft or profession; Contract each binding agreement between the Customer and the Supplier for the sale and purchase of Goods; Delivery Location the Supplier's premises or other location where the Goods are to be supplied, as set out in the Order; Effective Date ; Goods any goods of the number, description and specification set out in the Schedule to this Agreement; Insolvency Event any event referred to in sub-clauses (b) to (f) under Duration and Termination; Order the Customer's order for the Goods from the Supplier which shall be on the terms of this Agreement; Working Day any day other than a Saturday, Sunday or public holiday in England and Wales;
- Unless the context requires a different interpretation:
- all singular words include plural ones and vice versa;
- all references to sub-paragraphs, paragraphs, schedules or appendices are to the ones in this Agreement;
- all references to a person includes firms, companies, government entities, trusts and partnerships;
- the term 'including' does not exclude anything not listed;
- all references to statutory provisions include any changes to those provisions;
- no headings or subheadings form part of this Agreement.
- This Agreement shall apply to all supplies of Goods by the Supplier to the Customer. Any quotation of the Supplier does not constitute an offer to sell. If the Buyer wishes to purchase the Goods the subject of a quotation, it must place an order. No order of the Customer for Goods shall be binding and no Contract shall arise until the Customer's order is accepted by the Supplier expressly or by the Supplier dispatching any of the Goods. Each Contract shall comprise this Agreement, the Supplier's quotation and any additional terms that are agreed in writing as applicable. All other terms which the Customer seeks to apply will not apply.
- If any Contract contains provisions which conflict with this Agreement, those provisions of the Contract will prevail to that extent, except nothing shall prevail over the exclusions and limitations of the Supplier's liability in this Agreement unless the provision expressly refers to those exclusions and limitations and states that it prevails over them.
- The description of the Goods is as set out in the Schedule to this Agreement.
- In the case of Goods made to the Customer's special requirements, it is the Customer's responsibility to ensure that any information provided by it is accurate.
Basis of Sale
- When an Order has been made, the Supplier can reject it for any reason.
- Any quotation is valid for a maximum period of days from its date, unless expressly withdrawn by the Supplier at an earlier time.
- No variation of the Contract, whether about description of the Goods, price or otherwise, can be made after it has been entered into unless the variation is agreed by the Customer and the Supplier in writing and signed by each party or someone authorised to sign on their behalf.
Price and Payment
- The price of the Goods is that set out in the Supplier's price list current at the date of the Contract or such other price as may be agreed in writing by the Supplier and the Customer.
- Prices exclude VAT and other sales taxes and duties.
- Payment for Goods must be made without and set off, withholding, deduction, abatement or counter-claim despite ownership of the Goods not having passed to the customer.
- The Supplier can attribute money received from the Customer as being payment for whichever Goods as the Supplier chooses, regardless of the circumstances.
- Where the Supplier has undertaken to arrange for carriage it shall do so as agent for the Customer and can charge for delivery and any transit insurance.
- If the Customer fails to make any payment when due, without affecting any other rights which it may have, the Supplier shall be entitled to exercise all or any of the following rights:
- suspend production and/or deliveries of Goods and/or performance of Services until paid;
- charge interest on the overdue amount at a rate of % per annum above the official Bank of England Rate from time to time which shall accrue from day to day (both before and after any judgment) from the due date until payment in full is received by the Supplier or, if higher, equal to compensation and interest in accordance with the Late Payment of Commercial Debts (Interest) Act 1998 (as amended).
- Times for delivery or performance by the Supplier are estimates only and, except by operation of law or as otherwise agreed, time shall not be of the essence.
- If delivery of any Goods has not been made 30 days after the agreed time, the Customer shall be entitled to rescind the Contract in respect of those Goods and return them, and the liability of the Supplier shall be limited to a cancellation of the price due for those which have not been accepted by the Customer.
- The Customer shall be deemed to have accepted Goods days after their delivery. After acceptance, the Customer shall not be entitled to reject Goods which are not in accordance with the Contract.
- The Supplier will deliver the Goods:
- to the Delivery Location by the time or within the period, agreed in the Contract, or failing any agreement, without undue delay
- If the Customer or its nominee fails, through no fault of the Supplier, to take delivery of the Goods at the Delivery Location, the Supplier can charge the reasonable costs of storing and redelivering them.
- Any claim that Goods have not been delivered must be notified in writing to the Supplier no later than Working Days after the agreed date for delivery.
- The Customer must inspect the Goods immediately on delivery and must no later than Working Days after delivery notify the Supplier in writing of any shortage in delivery, damage or any other non-conformity with the Contract that ought reasonably to have been apparent on a reasonable inspection of the Goods.
Risk and Title
- Risk of loss of or damage to the Goods shall pass to the Customer at the time of delivery of the Goods.
- The Supplier will still own the Goods, regardless of delivery, until the Customer has paid the Supplier in full for those Goods and VAT thereon, and all other sums due from the Customer to the Supplier at that time, provided that the property in the Goods can pass from the Supplier upon such property passing to the Customer's buyer in the manner permitted below.
- While the Supplier still owns any of the Goods, the Customer:
- will hold those Goods on a fiduciary basis as the Supplier's property and on the Supplier's behalf as bailee and depository for the Supplier and the Supplier must ensure that they are clearly identifiable as belonging to the Supplier;
- can use or resell those Goods on its own account in its ordinary course of trade to its usual type of customers only, but (in addition to the Supplier's other rights) this right will terminate immediately if any step occurs towards an Insolvency Event;
- must not otherwise deal with, pledge, encumber (except by floating charge), sell or dispose of those Goods.
- If any step is taken towards any Insolvency Event or if the Customer is overdue in any payment due, all sums shall become immediately due and payable and the Supplier can choose, by immediate notice to the Customer, to end the Customer's right, if still continuing, to use or resell the Goods still owned by the Supplier, enter any place to recover those Goods, and suspend or cancel any deliveries, and the Supplier shall be entitled upon demand to the immediate recovery of all those Goods. The Customer irrevocably gives the Supplier authority to enter any place to recover those Goods. Such recovery shall not cancel the Customer's obligation to pay the price for those Goods, provided that the Supplier must make a fair allowance for the value of any Goods which the Supplier has recovered.
- If the Goods do not conform to any applicable statutory warranties or other terms, the Supplier will, at its option, repair or replace the relevant item of Goods (or any defective part) or offer a refund of all or a fair and reasonable part of the price paid for the relevant item (against return of the such item at the cost of the ). If the Supplier complies with this obligation it shall have no further liability in respect of, or arising from the relevant Goods.
- Where the Customer enters into the Contract as a Consumer, the Customer's statutory rights are not reduced or affected by this Agreement.
Circumstances beyond reasonable control
- In the event of any failure by the Supplier because of something beyond its reasonable control, including industrial disputes (whether or not involving employees of the Supplier) or failure or delays by the Supplier's suppliers:
- it will advise the Customer as soon as reasonably practicable; and
- the Supplier's time to fulfil obligations will be extended so far as is reasonable, provided that it will act reasonably, and it will not be liable for any failure which it could not reasonably avoid.
- The Supplier shall have no liability however arising for:
- a claim, or series of claims arising out of the same circumstances, arising out of the Supplier's negligently causing damage or loss to physical property other than the Goods, in excess of £ ; and
- all other claims in total, in excess of a sum equal to % of the price paid and payable (exclusive of VAT and other taxes and duties) by the Customer for the Goods under the Contract giving rise to the claims.
- Despite any other provision of the Contract, but subject to the first clause under Excluding liability, the Supplier shall have no liability however arising out of or in connection with the Contract and/or the supply of the Goods for any:
- direct or indirect loss of or damage to:
- anticipated savings;
- indirect or consequential loss or damage;
- direct or indirect loss of or damage to:
- The Supplier shall not be liable to the Customer for any claim unless made with reasonable details in writing to the Supplier without unreasonable delay and in any event no later than (i) 3 months, or such longer period as may be reasonable in the circumstances, after the date the claimable event first came (or ought reasonably to have come) to the Customer's notice, and (ii) no later than 12 months after the delivery of the relevant Goods.
- The term "however arising" when used or referred to in this clause covers all causes and actions giving rise to the liability of the Supplier arising out of or in connection with the Contract and/or the Goods including whether arising by reason of any (i) misrepresentation, negligence, breach of statutory duty, other tort, repudiation, renunciation or other breach of contract, restitution or otherwise; or (ii) total or partial failure or delay in supply or defective Goods.
- The exclusions and limitations of liability contained in this Agreement and in the Contract shall apply regardless of whether the loss or damage was foreseeable or whether the Customer notifies the Supplier of the possibility of any greater loss or damage, but shall not apply to the extent not permitted by law and, in particular, nothing in this Agreement shall affect liability for death or personal injury caused by negligence or for fraudulent misrepresentation or other fraud.
- Where the Contract is entered into with a Consumer, the statutory rights of the Customer are not affected by this Agreement.
- The Customer should consider taking out its own insurance, and the Customer acknowledges that it had the opportunity to negotiate variations to the exclusions and limitations, upon the agreement of a higher price.
Duration and Termination
- This Agreement commences on the Effective Date and either party can end this Agreement and each Contract which has not already ended by giving written notice to the other party.
- Either party can end this Agreement and each Contract which has not already ended by giving immediate written notice to the other if the other party commits a material breach of this Agreement and fails to remedy it within days after being given written notice giving full particulars of the breach and requiring it to be remedied.
- Either party can end this Agreement and each Contract which has not already then ended by immediate written notice to the other if:
- that other party commits a material breach of this Agreement which is not capable of remedy;
- that other party is dissolved, wound up or becomes unable to pay its debts as they fall due;
- a receiver is appointed, of any of the property or assets of that other party;
- that other party makes any voluntary arrangement with its creditors or becomes subject to an administration order (within the meaning of the Insolvency Act 1986);
- that other party has a bankruptcy order made against it or goes into liquidation;
- that other party suspends or ceases, or threatens to suspend or cease, to carry on all or a substantial part of its business (any of the events in sub-clauses (b) to (f) under this clause being an "Insolvency Event")
- that other party, being an individual, dies or as a result of illness or incapacity becomes incapable of managing their own affairs; or
- there is a change of control of that other party (within the meaning of section 1124 of the Corporation Tax Act 2010).
Consequences of Termination
- This Agreement's termination will not affect either party's accrued rights.
- Other than as set out in this Agreement, neither party will have any further obligation to the other under this Agreement after its termination.
- The Contracts (Rights of Third Parties) Act 1999 does not apply to this Agreement and no third party will have any right to enforce or rely on any provision of this Agreement.
- Unless otherwise agreed, no delay, act or omission by a party in exercising any right or remedy will be deemed a waiver of that, or any other, right or remedy.
- Provisions which by their intent or terms are meant to survive the end of this Agreement, will do so.
- Any notice (other than in legal proceedings) to be delivered under this Agreement must be in writing and delivered by pre-paid first class post to or left by hand delivery at the registered address or place of business of the notified party, sent by fax to its fax number or by email to its business email address.
- sent by post will be deemed to have been received, where posted from and to addresses in the United Kingdom, on the second Working Day and where posted from or to addresses outside the United Kingdom, on the tenth Working Day after the date of posting;
- delivered by hand will be deemed to have been received at the time the notice is left at the proper address;
- sent by fax will be deemed to have been received on the next Working Day after transmission;
- sent by email will be deemed to have been received immediately after transmission.
- The Supplier can assign, or deal in any other manner with any of its rights under this Agreement or sub-contract all or any of its obligations under it. The Customer cannot assign or otherwise deal with any of its rights or obligations under this Agreement, or subcontract any of its obligations under it.
- The Customer acknowledges that it does not rely on, and shall have no remedy in respect of, any representation, whether negligent or not, of any person which is not expressly set out in this Agreement, and the only remedy available to it for breach of any representation that is expressly set out in this Agreement shall be for breach of contract.
Governing law and jurisdiction
- This Agreement is governed and interpreted by the law of England and Wales. All disputes arising under this Agreement will be subject to the exclusive jurisdiction of the English and Welsh courts.
The parties have signed this Agreement on the date first before written:
THE SCHEDULE - SPECIFICATION OF SERVICES
About Sales Agreements
Learn more about making your Sales Agreement
How to make a Sales Agreement
Making your Sales Agreement online is simple. Just answer a few questions and Rocket Lawyer will build your document for you. When you have all of the information about the sales relationship prepared in advance, creating your document is a quick and easy process.
You’ll need the following information:
The supplier and the customer
Who is the supplier’s signatory, if it’s a company or a partnership? This is the person who will sign the Agreement on the company’s or partnership’s behalf.
What is the customer’s name, address, and legal structure? If it’s a company, what is its company number?
Who is the customer’s signatory, if it’s a company or a partnership?
Will the supplier provide any of the following warranties (ie promises) for specified warranty periods (ie as opposed to just offering them for a reasonable time, as required by law):
That goods will be delivered free from defects?
That goods will conform with any specifications that were provided?
That goods will be suitable for their usual intended purpose?
If the supplier is providing warranties for specified periods, covering at least one of the terms above, are any of the following not covered by the supplier’s warranties:
Fair wear and tear or damage caused to the goods by customers?
Failure to install or use the goods in accordance with any instructions?
Any repairs, alterations, or modifications carried out on the goods by anyone other than the supplier?
Claims resulting from any goods specifications provided by the customer (eg if goods made based on these turned out to be not fit for purpose)?
Damage to consumable goods?
Goods not manufactured by the supplier?
What goods are being sold? You must provide a description and a detailed specification of the goods, as well as the quantity to be sold and the price per unit (ie item).
If you’re including a specified warranty period, how long is the warranty period for each type of good? You can select from 1-12 months.
Will the supplier provide any services under this Agreement?
Orders and payments
When the supplier makes a quotation for a sale under the Agreement, how long is the quotation valid for?
Do orders need to be paid for before goods are delivered or after an Invoice is received?
If before delivery, at least how many days before delivery must payment be made?
If after an invoice, within how many days following receipt of the invoice must payment be made?
What is the contractual interest rate to be applied to late payments (ie what percentage above the Bank of England base rate)?
Delivery and returns
Can the supplier deliver goods in instalments?
How many days after delivery is the customer deemed to have accepted the goods?
Within how many working days following an agreed delivery date does the customer have to notify the supplier of any undelivered goods?
Within how many working days after a delivery must the customer tell the supplier about any shortages or damages to the goods?
If faulty goods are returned, does the supplier or the customer have to pay the costs of returning them?
The Sales Agreement itself
What is the limit of the supplier’s public and product liability insurance?
What limit will you set on the supplier’s general liability for breaches of this contract? This will be set as a percentage of the total price the customer has paid (and must pay) for goods under a specific order under this Agreement.
How much notice must either party give to end this Agreement?
If one party commits a material breach of this Agreement (eg a non-trivial breach that has a serious impact on the innocent party), how many days’ notice is required to end the Agreement if the breach is not remedied?
What is the date of the Sales Agreement (ie is it a specified date that’s different to the date of signature)?
Will the Agreement be governed by the laws of England and Wales or the laws of Scotland?
Common terms in a Sales Agreement
Sales Agreements set out the terms on which a supplier will provide goods to a customer. To do this, this Sales Agreement template includes sections headed:
The contract starts by clearly identifying who the supplier and the customer are. These are the parties to the Agreement.
This definition table assigns specific meanings to key terms used throughout the Agreement. When these terms (eg ‘Contract’ or ‘Order’) are used capitalised throughout the Agreement, they carry the meaning they’re given in this table.
The table also provides some key information about the Agreement, for example, the date of the Agreement.
This key section explains how this Sales Agreement operates in relation to the sale of goods by the supplier to the customer. It explains that individual orders (ie ‘Contracts’) should be formed between the customer and the supplier for each sale of goods. These individual contracts are not formed (ie legally binding) until the customer places an order and the supplier accepts it. Such contracts will incorporate the terms of this Sales Agreement as well as terms included in the individual orders and any relevant quotations issued by the supplier.
This section also explains that the terms of individual contracts will prevail over those in this Agreement, if there are discrepancies, with exceptions regarding clauses dealing with limitations of liability.
This section identifies the goods covered by this Agreement, by reference to the Agreement’s schedule. It also sets out the customer’s responsibility to ensure the accuracy of any information they provide for goods being made especially for the customer.
Basis of sale
This section contains basic rules about sales made under the Agreement. For example, the supplier may reject an order for any reason. The time period that quotations made under the Agreement are to last for is also specified.
Price and payment
This section explains where prices for relevant goods can be found and sets out rules for payments (eg when payments must be made and at which rate interest will be applied to late payments).
The section explains the time frames within which deliveries should be made and sets out what happens if this does not occur (eg the customer may return the goods for a refund). This section also specifies how many days after delivery the customer is deemed to have accepted goods. This is the point after which the customer loses the right to exercise various statutory remedies. This section also sets out the time frames within which the customer should notify the supplier of any damage to goods or of any undelivered goods.
Risk and title
This section explains at which point during the sale ownership of the goods transfers from the supplier to the customer (ie once the customer has paid for them and other conditions have been met).
It also explains that the risk of loss or damage to the goods may pass to the customer at a different time to ownership of them (eg they must bear losses suffered as a result of damage to the goods from the point of delivery, subject to warranties).
This section also explains what happens if a payment is overdue or if the customer is taking certain steps towards insolvency.
The various promises the supplier is making relative to the goods are set out here. Which specific warranties (ie promises) are included depends on your individual circumstances and negotiated terms.
If the supplier chooses to grant warranties for certain goods for specified time periods (ie as opposed to just relying on the warranties automatically imposed by law, which apply for a reasonable rather than specified time period after delivery of the goods), these will be set out here. Any specific instances in which the supplier is not responsible for issues with goods are also set out here. For example, if any fair wear and tear is caused to the goods by the customer.
This section also qualifies the supplier’s voluntary warranties by stating that they will not apply while payments are overdue.
Circumstances beyond reasonable control
This section explains what should happen if an event beyond the supplier’s reasonable control occurs that prevents them from delivering on time. They must alert the customer and should be given a reasonable amount of extra time to deliver.
This section sets numerical and categorical limits on the supplier’s liability to the customer for any losses the customer accrues as a result of specific types of conduct by the supplier relevant to this Agreement.
Exceptions to the limitation of liability are also set out, some of which are required by law (eg liability for death or personal injury due to negligence cannot be excluded).
Duration and termination
The amount of notice that either party can give to end this Agreement is set out in this section. A separate notice period is provided for ending the Agreement due to the other party’s material (eg significant) and unremedied breach of contract. Various circumstances are set out in which the Contract can be ended immediately by written notice (eg if the other party becomes insolvent or has a receiver appointed).
Consequences of termination
This section makes provisions about what will happen after the Agreement ends. For example, the parties’ obligations to each other will end unless otherwise specified in the Agreement.
This section deals with various other points of law that govern how this Agreement operates. For example:
allowing the supplier to deal with the Agreement (eg by assigning their rights or obligations under it to another party). The customer is not granted the same permission
excluding the Contracts (Rights of Third Parties) Act 1999 or the Contract (Third Party Rights) (Scotland) Act 2017. This essentially means that third parties (ie not the supplier or the customer) that would otherwise be able to enforce obligations under this Agreement under the Act cannot do so
setting out how any notices or other similar communications that must be given under the Agreement should be delivered
This section states the customer’s acknowledgement that they are not relying on (and have no legal remedies in relation to) any representations (eg statements) that are not contained in this Agreement. This helps avoid confusion if, for instance, other terms were in contemplation during negotiations.
Governing law and jurisdiction
This section sets out which country’s legal system must be used to resolve any disputes. This is the Agreement’s jurisdiction. This is necessary as the legal systems of England and Wales and of Scotland are different.
The body of the Agreement ends with spaces for both parties to sign and date the Agreement to make it legally binding.
The schedule - specification of goods
Details of the goods that are available for purchase under this Sales Agreement are provided here. A description of each available type of good is set out alongside any specified warranty period.
The quantity and price applicable to the type of good are included. However, you may prefer to leave the quantity and price cells blank if these details are open-ended (eg if they depend on individual quotations and orders still to be made and agreed to under the Agreement).
If you want your Sales Agreement to include further or more detailed provisions, you can edit your document. However, if you do this, you may want a lawyer to review the document for you (or to make the changes for you) to make sure that your modified Sales Agreement complies with all relevant laws and meets your specific needs. Use Rocket Lawyer’s Ask a lawyer service for assistance.
Legal tips for customers and suppliers
Make sure a Sales Agreement is the right document for you
This Sales Agreement is intended to be used for the sale of goods from one business to another, particular business. If this isn’t your situation, another document may be more appropriate. For example:
a Sale of personal goods contract - if you’re a private individual (ie not a business) selling to another private individual
a Services agreement - if you are a business that wants to supply services to another business
Terms and conditions - if you want to set out standard terms that are intended to apply to dealings with all customers, rather than one distinct customer
Take note of when a contract is legally binding
This Sales Agreement is intended to be a legally binding contract, as long as it is correctly made and signed. The Agreement, however, is a master agreement. This means that it sets out general terms for the sales that are to take place between the supplier and the customer, which will apply to each individual contract (ie sale) made under the master agreement.
Individual contracts for sale will generally be formed when both parties agree to all of the terms. For example, a quotation or an order on its own will not form a binding contract. The binding contract will be formed once, for example, the supplier accepts an order. Make sure you understand how this works so that you can confidently sell or purchase goods under your Sales Agreement.
For more information, read How to form a valid contract.
Understand when to seek advice from a lawyer
In some circumstances, it’s good practice to Ask a lawyer for advice to ensure that you’re complying with the law and that you are well protected from risks. You should consider asking for advice if:
you are unsure whether you need to use this Agreement
you want help setting out individual orders or quotations made under your Sales Agreement
you are dealing with goods where there is a focus on intellectual property
Sales Agreement FAQs
What is included in a Sales Agreement?
This Sales Agreement template covers:
which goods are to be supplied and how
prices to be paid for the goods
descriptions of the goods
delivery and returns provisions
limitation of liability
remedies available for breaches of this Agreement
Why do I need a Sales Agreement?
Although a valid contract can be formed with minimum formality, it’s always a good idea to make a formal, written contract when you agree to sell goods to or purchase goods from another party. Creating a written Sales Agreement enables the parties to clearly set out their expectations regarding future transactions and helps them to explicitly agree on terms.
This reduces the chances of disputes arising later on and protects both parties by creating an evidentiary record of what they agreed to.
What is the difference between a Sales Agreement and terms and conditions?
A Sales Agreement is a contract that sets out the terms of sales (whether this consists of one or multiple orders) between a supplier and one of their customers.
Terms and conditions, on the other hand, are a set of standard terms created by the supplier that are intended to apply to all sales the supplier makes to all customers. Certain requirements must be met for them to apply to a contract. For example, the terms and conditions should be brought to a customer’s attention before the customer makes an order.
Is a Sales Agreement binding?
A Sales Agreement is a contract and, as such, is intended to be legally binding. As long as it is correctly executed (eg signed), its terms will bind the parties unless the terms don’t comply with the law (eg if they’re considered unreasonable). You can Ask a lawyer to check your Agreement for you if you’ve included terms that you’re not confident are reasonable.