Finance & Economics

Elements to include in a sales сontract

Mian Azhar



Also known as a sales agreement or purchase agreement, a sales contract highlights the agreed-upon terms between a buyer and seller. Small-scale and established businesses should use this agreement to ensure that transactions between the business and other parties flow smoothly. This document should be kept for record-keeping and legal purposes by both parties.

Ideally, a sales contract should include several details of the transaction, specifically the goods, services, or property transacted, and a promise of payment. It should clearly identify the seller, buyer, goods, and other important terms. Given the complexity of these contracts, businesses should take advantage of SpotDraft to streamline and close their sales deals faster. Below are the key elements of a sales agreement that should be featured;

Description of goods

A detailed description of goods is probably the most important part of sales contracts. Unfortunately, this is where most people make simple but costly errors when transacting. This section should identify the specific products or services the buyer intends to purchase. It should highlight all the relevant information, including

  • Specific type
  • Weight
  • Model number
  • Size
  • Color
  • Term length
  • Amount/quantity

If the contract is about services, it should highlight the deliverables. For instance, if contracted to create a brand website, the contract should describe the web pages, photos to be used, graphics, and any other special features of the project.

Payment plan

Most contract negotiations center around payment. As such, it is important to put everything in writing once you agree on a favorable payment plan. Besides the agreed-upon amount, the sales contract should also capture the following;

  • Adjustments and deposits
  • Payment timelines
  • Acceptable methods of payments, be it bank transfer, check, or cash
  • If the payments can be made in installments or a one-time lump sum
  • How and when the invoice will be sent to the buyer

A promissory note is often included in the sales contract if the buyer won’t immediately clear the full amount. The promissory note highlights more details of the payment terms, such as the schedule and interest charged.

Delivery instructions

Your sales contract should also clearly outline the delivery instructions. Key delivery details include:

  • Method of delivery
  • Delivery time
  • Delivery cost
  • Where to deliver
  • Liabilities for damage or failed deliveries

Most sales contracts also include a force majeure, a section that outlines what should be done in case of failed deliveries due to factors that cannot be controlled by the buyer and seller, such as floods and natural disasters.

Other provisions

Depending on the nature of goods or services involved in the transaction, a sales contract can include the following;

  • Warranty: Guarantees buyers that the products or services fulfilled meet the expected quality and reliability.
  • Governing laws: This section outlines the state laws applicable during the interpretation of the contract.
  • Breach of contract: Highlights the actions to be taken on the party that violates the agreement.


The buyer and seller should have a written agreement before engaging in any transaction. While developing a sales contract is quite complicated, it saves the involved parties from future issues. Note that sales agreements differ based on the industry and nature of goods or services involved in the transaction.


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