To avoid these types of miscommunications, you should always use a sales agreement when conducting large transactions. This way, you can make sure both your company and the buyer are on the same page.

When a sales transaction takes place between two businesses (B2B sales), there are often numerous people involved. On the seller’s side, you’ll have one or several representatives from the sales team. On the buyer side, you’ll have whoever is responsible for procurement at the buyer’s organization—for example, procurement managers or executives. And of course, because we’re talking about an official contract, the legal team will probably be involved too. 

You may also have heard of something called a “bill of sale.” While this is similar to a sales agreement, the two documents aren’t the same. A sales agreement is like a contract—it’s used to define the terms of a complex transaction or ongoing project. On the other hand, a bill of sale is more like a receipt. It serves as proof that a transaction was completed. For some types of transactions, you may need both a sales agreement and a bill of sale.

How to write a sales agreement

The information below is designed to help you understand what’s commonly included in a sales agreement. However, it’s not legal advice. For help with creating a legally-binding sales agreement tailored to your specific situation, you should consult a lawyer.

For most sales agreements, you’ll want to:

1. Identify the parties involved

Decide who will officially represent your organization in this sale. This may be one person, or it may be multiple people. Once you’ve defined who the seller representatives and buyer representatives will be, include space for their names and contact details, such as email addresses and phone numbers.

2. Provide a description of the goods and/or services being sold

Create a detailed list of the item(s) being sold. Don’t forget to also include information on related services, if they’re part of the package as well.

There are a few different types of goods you might include in a sales agreement:

• Existing goods: Goods that already exist when the sale happens. These can be classified as: 

  • Specific goods / ascertained goods: Specific items that both parties agree to in the contract (like “this white MacBook Pro computer”)

  • Unascertained goods: Goods that aren’t specifically defined (for example, a contract for “1000 screws” or “100 lamps”)

• Future goods: Goods that don’t exist yet, but are expected to exist in the future. Some examples include:

  • Products that aren’t yet manufactured

  • Crops that aren’t yet grown

  • Food that isn’t yet cooked

• Contingent goods: Goods that aren’t available yet, and will only be available for sale if certain conditions are met. For example, as a seller, you might be unsure if your crops will grow, if a shipment will come in on time, or if certain materials will be available. In this case, it may make sense to make a contingent agreement with the potential buyer. 

3. Include details about payment

Lay out the terms of payment for your sale. This may include the payment amount(s), payment dates, and expected payment methods.

Some things to consider when drafting this section:

• When will the invoice be sent?

  • Up front? After goods are delivered?

• When will payment be due?

  • Within X days of receiving the invoice?

• If the invoice isn’t paid on time, will there be a late fee?

• How will the payments be structured? 

  • In installments, in one lump sum?

• Which payment methods are accepted? 

  • Cash, check, bank transfer, etc.

• Who will be responsible for paying taxes or fees on the sale?

4. Include details about the delivery or implementation

Describe exactly how the sale will take place. If you’ve included onboarding, installation, or maintenance services as part of your sales package, this is where you can elaborate on those.

You should define:

• When the goods will be delivered (shipped by the seller, or picked up by the buyer)

• Who will pay for any shipping costs

• Who will inspect the goods, and how the inspection process will work

• Are any additional onboarding, installation, or maintenance services included?

  • If so, what exactly are these services?

  • When and how will they be delivered?

5. Account for each party’s liability

A key part of any legal contract is defining and limiting liability. Your sales agreement should include clauses to define who will be liable in the case of loss, damage, or delivery failure. It should also describe when exactly the risk of lost or damaged goods shifts from the seller to the buyer.

6. Establish warranty information (if applicable)

Often, a seller will guarantee against defects for a certain number of years after a sale. For example, if you buy a new computer, the manufacturer might offer to repair it for up to three years after your purchase. This type of warranty is called an explicit warranty.

If you’re planning to offer an explicit warranty as part of your sale, make sure your contract contains these details:
 

• Is a warranty included with the product?

• What are the terms of the warranty?

  • When does the warranty expire?

  • What exactly is covered under the warranty?

• What happens if the warranty is breached?

In some jurisdictions, consumers might also be protected by a default implied warranty, such as a legal requirement that all products must be “merchantable” (fit for purpose) before being sold. This type of warranty may be modifiable if explicitly stated in a sales agreement. 

7. Address potential breach of contract and dispute resolution 

There’s always the chance that something may go wrong, and one of the parties might end up breaching the terms of the sales agreement. In this case, it’s important to set clear expectations for what should occur.

If the seller and buyer are in different legal jurisdictions, the contract should specify which country, state, or region’s laws will apply as governing law. It should also make clear which type of dispute resolution will be used to resolve the disagreement.

Some common types of dispute resolution include:

• Litigation: A trial in court

• Arbitration: A process where a neutral third party (the “arbitrator”) settles the dispute privately. This process is legally binding, and is governed by international conventions like the New York Arbitration Convention

• Mediation: A process where a neutral third party (the “mediator”) tries to help both parties settle the dispute. Mediation is typically not legally binding

8. Define when and how the agreement may be canceled

Maybe at some point, one or both parties will decide they want to cancel the agreement and not go through with the sale. To avoid misunderstandings (like canceling an order after it has already been shipped), the sales agreement should clearly define exactly when and how the sale can be canceled.

Create sales agreement templates with a CRM

A Customer Relationship Management (CRM) platform can help you create standardized, easy-to-use, and attractive sales agreement templates. CRM software is designed to help you automate your sales process, shorten your sales cycle, and increase revenue.

With a CPQ (Configure, Price, Quote) solution built into your CRM, you can create and share professional-looking branded documents in just a few clicks. You can use a CPQ add-on to create invoices, quotes, onboarding documents, and contracts, including sales agreements.

Before creating a sales agreement, it’s important to make sure salespeople have access to the most up-to-date, accurate information (such as product pricing and descriptions) when closing the deal. A CRM can help you centralize your inventory management, speeding up the process and lowering the risk of mistakes. It will also help you accurately calculate the final package price, taking into account taxes and discounts. In addition, you can store information on your deals in the CRM, and automatically update your documents as you negotiate with buyers.

Once you’ve created a sales agreement, you can send it out directly to your buyer using the CRM system, and track their responses to see when they open and sign it.

In short, a CRM like Freshsales can help you:

• Easily create sales agreement document templates, so salespeople can simply fill in the details and send to buyers

• Tag documents to their respective prospects and deals, and store them all in one place

• Avoid pricing errors, formatting errors, and typos

• Cut down on back-and-forth between sales and legal teams

• Speed up your sales cycle and increase revenue

  • A survey by Aberdeen Research showed that CPQ users had higher conversion rates, a shorter sales cycle, more sales reps achieving quota, and over double the average deal size when compared to companies who didn’t use CPQ software