A sales agreement, also called a sales contract or purchase agreement, records the sale of goods in writing: what is sold, for how much, and on what terms. For a small cash sale across a counter, nobody writes one. For a larger order, made-to-order goods or a sale paid in instalments, it is what stops a misunderstanding about the specification, the delivery date or who pays for damage in transit from becoming a dispute.
You can start from our free sales agreement template, which has every clause below with sample wording. This guide explains what each part does and what to watch for.
This article is general information, not legal advice.
1. The parties
Use full legal names and addresses. If a business is buying or selling, name the business, not just the person signing for it: "Osei Boutique Hotel Ltd", not "Kwame". If the buyer is a consumer rather than a business, consumer protection law in your country may give them rights the agreement cannot remove.
2. A precise description of the goods
Most sales disputes are about whether the buyer received what they agreed to buy. Describe the goods closely enough that a stranger could check the delivery against the agreement:
- What: model numbers, materials, sizes, colours, grades.
- How many: quantities, and how partial deliveries are handled.
- Condition: new, refurbished or used, and any known defects.
Attach a specification, drawing or photo if words are not enough, and say in the agreement that it forms part of it.
3. Price, deposit and payment terms
State the unit price, the total, and whether tax and delivery are included. Then say how and when payment is made:
- A deposit on signing, especially for made-to-order goods. It covers your costs if the buyer cancels and shows the buyer is committed. Our guide to asking a client for a deposit covers how much to ask for and how to word it.
- The balance: on delivery, within a number of days of delivery, or in instalments with dates.
- Late payment: what happens if the balance is not paid on time.
4. Delivery
Give the delivery address, the date or window, who arranges transport and who pays for it. Say what happens if delivery is late: a new date agreed in writing is better than silence. For international sales, traders often use Incoterms, standard terms published by the International Chamber of Commerce that define who handles and pays for each stage of shipping.
5. Ownership and risk
These are two different things, and a good sales agreement treats them separately:
- Risk is who bears the loss if the goods are damaged or lost. It usually passes on delivery.
- Ownership (title) is who owns the goods. Sellers often keep ownership until they are paid in full, a "retention of title" clause, so unpaid goods can be recovered.
6. Inspection and acceptance
Give the buyer a short period after delivery to inspect the goods and report shortages or damage in writing. After that, the goods are treated as accepted, except for hidden defects that could not reasonably have been found. This protects both sides: the buyer gets time to check, and the seller is not facing complaints about a delivery months later.
7. Warranty and faulty goods
Say how long the goods are warranted, what is covered, and what the seller will do: repair, replace or refund. Exclude what is fair to exclude, such as misuse and normal wear. Statutory rights, especially for consumers, apply whatever the contract says.
8. Cancellation
Can the buyer cancel, and until when? A common approach: free cancellation before the goods are made or dispatched, with the seller keeping reasonable costs from the deposit; after dispatch, only by agreement.
9. The general terms
- Entire agreement: the written agreement replaces earlier conversations.
- Changes: only in writing, agreed by both.
- Governing law: which country's (or state's) law applies.
10. Signatures
Both parties sign. Signing electronically is fine for ordinary sales of goods in most countries, under laws such as the US ESIGN Act and the EU's eIDAS Regulation, and it gives a better record than a scanned signature: each signer's consent, the time they signed and the signed PDF itself.
With Salsox, you fill in the template, send it, and the buyer signs from a link on their phone. You can see when they have opened and signed it:
If your business needs someone to approve the terms before the buyer sees them, add them as an approver and turn on signing order, as above. On the Business plan the buyer can also pay the deposit as part of signing, by card or, through Paystack, mobile money. Sequential vs parallel signing explains when signing order helps, and how to sign a contract online walks through the whole process.
Checklist before you send
- Parties named in full.
- Goods described so a stranger could check the delivery.
- Price, deposit and balance terms clear.
- Delivery date, address and cost stated.
- Ownership and risk addressed.
- Inspection period, warranty and cancellation set out.
- Governing law chosen.
Get it signed
Open the free sales agreement template, fill in your details and send it for signature. You can create a free account and send 3 documents a month; Sign & Pay and signing order are on the Business plan, listed on the pricing page.
Frequently asked questions
What should a sales agreement include?
The parties, a precise description and quantity of the goods, the price with any deposit and payment terms, delivery details, when ownership and risk pass, an inspection period, the warranty and remedy for faulty goods, cancellation terms, the governing law and both signatures.
Is a sales agreement the same as a sales contract?
Yes. The terms are used interchangeably for a written agreement to sell goods. A purchase agreement is the same document seen from the buyer's side.
Does a sales agreement need to be notarised?
Ordinary sales of goods do not. Sales of land and some other assets have formal requirements that vary by country, so check before using a general template for those.
Can a sales agreement be signed electronically?
Yes, in most countries, under laws such as the US ESIGN Act and the EU's eIDAS Regulation. Both parties sign from their own link, and the signed PDF keeps a record of who signed and when.
General information, not legal advice. Contract and consumer law differ by country; for a specific sale, consult a qualified lawyer.