Contract Sales Agreement

Contracts are difficult to write, even for lawyers, because every sentence may have legal consequences if the contract is ever the subject of litigation. You must take into account general contract law, issues that are specific to sales contracts and the details of your particular deal. A well-written contract anticipates potential disputes and resolves them before they occur.

Identification of Parties and Agents

• In many sales contracts, the parties are companies rather than individuals. In this case, identify the company by its legal name, not its trade name. If the party is a corporation, this will be shown on the articles of incorporation. However, companies can't sign contracts; only individual agents representing them can. Make sure that the person signing a contract on behalf of a company has the legal authority to represent it. If the representative is a director or officer of the company, this shouldn't be a problem. Otherwise, the agent should present a statement of authority from the company, signed by a director or officer, notarized, and stamped with the company's official seal.

Products

• The products being sold must be identified in detail. Catalog numbers should be included if they exist. The exact quantity of each product being sold must be listed, along with the unit price of each product. If you are selling real estate, don't identify the real estate by address; look up the property at the local land recorder's office, and identify the property the way it is identified in these records (normally a lot number will be used).

Warranties

• The contract should list the seller's warranties. These warranties include warranties concerning the quality of the product, the appropriate uses of the product and refund and exchange policies. Some warranties, such as the implied warranty of merchantability, will be enforced even if they are not written into the contract. The implied warranty of merchantability guarantees that the product will perform the function for which it was designed.

Disclaimers

• The seller should specifically limit its liability for defective products. It is particularly important for the seller to disclaim liability for incidental and consequential damages -- personal injuries due to product defects, for example, or loss of income in case a factory must close down due to malfunctioning machinery. These disclaimers should be printed in all capital letters to ensure they are conspicuous. Check the law of your state before completing disclaimer provisions; although state law differs, most states limit the ability of the seller to disclaim liability for a defective product.

Contract Boilerplate

• The term "contract boilerplate" refers to standard provisions that are included in nearly every business contract. An example would be a dispute-resolution clause. If you select arbitration as your dispute-resolution method, for example, the contract cannot be taken to court except under limited circumstances.

Signature Page

• Prepare the legal name of the party below each signature line, along with the name of the authorized agent who will sign for the company, if the party is a company. Prepare as many copies of the contract as there are parties, and have each agent sign each copy, so that each party will have a copy of the contract with an original signature.