All About Sales Agreements

Business is powered by contracts. And when it comes to actual revenue, sales teams rely on sales agreement contracts more than any other. These are the contracts that enable businesses to function, provide reassurance to buyers, and keep the engine of commerce flowing.

But not all sales agreement contracts are the same, and it is not always easy to understand how they work. Read on to learn more about sales agreement contracts, how to create them, and how automation can decrease time to signature and improve the contract management process.

This blog post is offered for general information purposes only. It does not constitute, and is not a substitute for, legal advice.

What is a sales agreement? 

A sales agreement is a contract between a buyer and a seller that outlines the terms agreed to by both parties for the sale of something of value. A sales agreement contract is generally used for the sale of goods or property rather than services, which commonly use a statement of work (SOW) contract. When signed by both parties, a sales agreement contract creates a legal obligation for the buyer to pay the seller and for the seller to transfer the item being sold to the buyer.

While a sales agreement contract and a purchase agreement contract often refer to the same type of document, subtle differences can exist. Most often, how the contract is referred to is based on who is drafting it or which party has more obligations. However, in most day-to-day transactions, sales agreement and purchase agreement can be used interchangeably. 

What is included in a sales agreement? 

The elements of a sales agreement contract may vary slightly depending on the exact circumstances of the agreement. However, including all of the following elements will ensure all parties have their interests represented and protected by the sales agreement. 

Sales agreement contracts generally consist of the following sections:

• Buyer and seller contact information

• A description of the item being sold

• The price of the item being sold

• The terms of payment

• The frequency of payments and maturity date, if applicable

• The date the item will transfer to the buyer

• Disclosures

• Contingencies 

• Signatures 

Types of sales agreements

Sales agreement contracts are used in many kinds of transactions in both personal and commercial contexts. A few common use cases for sales agreements include:

• Asset sales, in which ownership of a business is being transferred between parties 

• Real estate sales, including home sales and commercial property sales

• Materials sales, such as a bakery ordering ingredients from a supplier  

• Vehicle sales, such as an individual buying a new car or a business buying a fleet

• Equipment sales, including everything from computers to machines used on the factory floor 

• Intellectual property sales, such as patents or publishing rights

How to create a sales agreement

With modern contract generation tools, creating sales agreements no longer requires printing hard copies and sending them to customers through the mail. There are multiple digital options you can use instead. 

Use a sales agreement template

Any business that sells a product will likely generate dozens if not hundreds of sales agreements per month. But generating a new agreement for each new customer requires a good deal of effort on the company’s part, especially if each contract is being generated from scratch.

To save time, businesses can take advantage of digital contract templates, such as the sale agreement template included in Docusign’s template library. By standardizing the contract generation process using a digital template, businesses can save significant time and avoid costly mistakes caused by data entry errors.

These templates also allow businesses to seamlessly take advantage of eSignature technology. This provides greater flexibility and better user experience for the signer, reassurance of signature authenticity to the business, and an overall faster time to signature.  

Automatically generate sales agreements

For businesses with high sales volume or with a relatively straightforward sales process, it may not be necessary to involve a sales representative generating the agreement. In these instances, every step of the process—from collecting customer information to signature workflows—can be automated using a eSignature solution custom built for sales teams.

An automated sales process can streamline the approval process by sidestepping the need for manually generating contracts, forwarding emails to the next signer, and generating and distributing final copies.

Cutting out these manual processes also eliminates much of the risk of human error, which can cause further delays in order fulfillment. A digital contract lifecycle management (CLM) solution can also be configured to send automatic reminders via email or text message to help reduce the time between receiving a contract and signing it. 

How to manage sales agreements

Getting a contract signed marks the end of the contract negotiation process—but it is just the start of CLM. It is important to store contracts in such a way that makes them easy to access when they need to be referenced months or years later.

While some companies still manage their contracts by storing paper copies in filing cabinets, more efficient and effective management solutions are available. A digital contract lifecycle management system can store every contract in a single, centralized repository. Unlike a filing cabinet full of folders, this system enables robust search and intelligent sorting. This makes  contract enforcement, audit processes, and even wide scale contract analytics much easier. 

Get started with a sales agreement contract template 

The first step towards automating your sales agreement process is to take advantage of a digital contract template. 

To explore how templates can improve your sales agreement process, sign up for a Docusign free trial.