Selling Agreement: Everything You Need to Know
A selling agreement is a detailed contract that outlines the terms of a sales transaction between two parties.3 min read updated on February 01, 2023
A selling agreement is a detailed contract that outlines the terms of a sales transaction between two parties.
What Is a Selling Agreement?
Selling agreements are also commonly referred to by the following terms:
- Sales agreements
- Sales contracts
- Goods contracts
Regardless of the name used to describe them, a selling agreement outlines the terms associated with a transaction between two people, groups of people, or legal entities. Selling agreements are detailed contracts that outline the terms associated with a sale of goods or services to a third party. They are normally used when goods, services, or items are sold and need to be delivered to the customer. It is worth noting, however, that selling agreements can't be used in real estate transactions due to certain rules that apply to them.
Some examples of transactions that selling agreements are appropriate for include:
- Selling physical goods or items, such as computers, cars, animals, etc.
- Providing services in exchange for money, such as installing a home appliance
- Selling a combination of goods and services, such as a computer and an installation service to accompany it
When you create a selling agreement, it is important to describe the product or service you are selling in as much detail as possible. This should include a detailed physical description of the product or service being sold as well as a quantity. There are two parties involved in a selling agreement:
- The buyer
- The seller
The buyer is the person or company that is purchasing a product or service from the seller. The seller is the person or company that is selling that same product or service to the buyer. It may also be a good idea to include terms that outline where the purchased items should be delivered. This may be any of the following:
- The buyer's address
- The seller's address
- Another location that is agreed upon by both parties
The seller is entitled to receive their compensation after one of the following has occurred:
- The item has shipped
- The buyer has received what they purchased
- A bill of sale has been drafted
What Is a Sales and Purchase Agreement?
Sales and purchase agreements are a specific kind of sales agreement that can be found in a number of business scenarios. They are most often related to real estate transactions and can be utilized as a way to finalize the interests of both involved parties before the transaction is closed. A sales and purchase agreement provides a basis for financial transactions to occur and includes details such as:
- A framework for how the transaction is to proceed
- What the transaction includes
- What the transaction does not include
Sales and purchase agreements provide the parties involved in the purchase of a specific asset with a means to negotiate and agree on an appropriate price for the transaction. These are not a requirement for every transaction, but are commonly used when a large single purchase takes place or in the event there will be a regular frequency of purchases over a specific period of time. Sales and purchase agreements not only outline the terms of the transaction, but also provide details pertaining to the buyer and seller.
These agreements are used to record the following:
- Deposits that are made as negotiations proceed
- Portions of the agreement that have been met
- Transactions that can be considered complete
- A record indicating when the final sale is expected to happen
Sales and Purchase Agreement Examples
Sales and purchase agreements occur most commonly in real estate purchase transactions. Part of the transaction's negotiation process includes the final sale price, which should be agreed on by both parties involved in the sale. In addition, things like closing dates and contingencies, which are also relevant to the transaction, should also be included in the agreement. A sales and purchase agreement can be found within the higher supply chains of a lot of large companies that are publicly traded.
Sales and purchase agreements are commonly used when a sale involving large quantities of materials from a supplier takes place. This can include things like a large-scale single purchase, such as a quantity of 1,000 individual items that must all be delivered at the same time.
If you need help with selling agreement, you can post your legal need on UpCounsel's marketplace. UpCounsel accepts only the top 5 percent of lawyers to its site. Lawyers on UpCounsel come from law schools such as Harvard Law and Yale Law and average 14 years of legal experience, including work with or on behalf of companies like Google, Menlo Ventures, and Airbnb.