Sales Agreement FAQ - United States


A Sales Agreement is a contract where a seller promises to sell something that a purchaser promises to buy. A Sales Agreement can be used to sell goods, assets, equipment, services, etc. A Bill of Sale is often used with a Sales Agreement to conclude the sale and transfer the title to the purchaser. Either a Sales Agreement or a Bill of Sale is required for any sale of goods of a value over $500.
Definitions
What is an Assignment?

An assignment transfers all of the rights and obligations that a party to a contract has to a third party. The party assigning the contract gives up its rights in the contract to the third party, who becomes a contractual party.

What is a Carrier?

A Carrier is a person or corporation to whom the Seller gives possession of the goods being sold, and the Carrier then delivers the goods to the Purchaser.

What is a certified check?

It is a check for which payment is guaranteed by the bank. A certified check shows that there are sufficient funds in the account to meet the amount for which the check was drawn. A certified check is less secure than a bank draft but more secure than an uncertified check.

What does "counterparts" mean?

Executed in counterparts means that each party can execute a different copy of the contract but all the copies together form a single contract. Usually all the signature pages are gathered together with one copy of the contract.

What is a deposit?

The deposit is money that the Purchaser is required to provide to the Seller up front, in order to convey that the Purchaser is serious about purchasing the property. The deposit prevents the Seller from selling the property to someone else. Usually, the Purchaser loses this 'earnest money' if the Purchaser fails to complete the transaction.

What does "Goods in Exchange" mean?

"Goods in Exchange" means that the Purchaser will be paying for the Seller's goods by giving the Seller goods, instead of paying with money. The Purchaser may also be required to give the Seller a cash deposit in addition to the goods being exchanged.

What is the location of the property?

The location of the property is the jurisdiction where the property is situated in or located in the time of the sale.

What are patent or trademark infringements?

A patent or trademark infringement occurs when a person without authority makes, uses or sells any aspect of a registered patent (product, idea or concept) or trademark (word, phrase or name).

What is a Promissory Note?

It is a legal document evidencing that the borrower will repay a loan to the lender under the terms agreed upon in the contract. A Promissory Note may also be referred to as an "I.O.U." or a Loan Note.

What is a security interest?

A security interest is an interest in real or personal property that is given to the Seller to secure the payment of an obligation owed by the Purchaser. The holder of the security interest can obtain the secured property in the event of a default.

What does "Services in Exchange" mean?

"Services in Exchange" means that the Purchaser will be paying for the Seller's goods by performing services for the Seller, as opposed to paying with money. The Purchaser may also be required to give the Seller a cash deposit in addition to the services being performed.

What is a Warranty?

This is a guarantee made by the Seller to the Purchaser as to certain qualities or characteristics of the property.


Sales Agreement Details
I am selling services to the Purchaser. Should I use the Sales Agreement or the Service Agreement?

LawDepot.com's Service Agreement would be used if the Seller is selling strictly services to the Purchaser. The Sales Agreement would be used if the Seller is selling either goods or goods and services to the Purchaser.

I am selling goods to the Purchaser. Should I use the Sales Agreement or the Bill of Sale?

Both of these contracts can be used to sell goods to a Purchaser. However, the Sales Agreement is more extensive than the Bill of Sale and should be used when you want a more detailed sale contract or when payment is not made at the same time the property is transfered. The Bill of Sale can be used when a simple contract evidencing a sale is sufficient.

Can I use the Sales Agreement to transfer real estate?

No, there are a number of issues not addressed in the Sales Agreement that a real estate transfer must contain. To transfer real estate, use our Real Estate Purchasing Agreement instead.

Can I use the Sales Agreement to sell stocks/shares?

No, LawDepot.com's Share Purchase Agreement should be used since the Sales Agreement doesn't address all of the relevant issues related to stocks/shares.

If I sell the goods "as-is without any warranties", what are my liabilities to the Purchaser?

The term "as-is without any warranties" means that the Seller is not guaranteeing the quality of the product to the Purchaser. The Seller is not liable for any imperfections or flaws in the goods. The Seller still could be liable for any fraudulent or intentional misrepresentations that it makes to the Purchaser. However, it is typically buyer beware when you purchase "as-is".

Who should bear the risk of loss?

The risk of loss is borne by the Seller initially, but is eventually transferred to the Purchaser. Typically, the risk of loss is transferred to the Purchaser when the Seller delivers the goods or a bill of sale to the Purchaser, but the risk of loss can also pass to the Purchaser when the Seller transfers the goods to a carrier who will deliver the goods to the Purchaser.

How long after delivery does the Purchaser have to make a claim against the Seller?

If there is a deficiency in the goods provided, the Purchaser must usually notify the Seller of the defect within 10 days of delivery. After the 10 days has elapsed without notice from the Purchaser, the Seller has no liability to the Purchaser for the goods.


Signing Details
I do not know when the Sales Agreement will be executed. Can I fill in the date later?

Yes, by selecting 'Unsure' as the date of execution, a blank line will be inserted into the contract so that you can add the correct date after printing the document.

Is the state of execution the same as the location of the property?

They can be the same jurisdiction, but do not necessarily have to be. The state of execution refers to the State where the Purchaser and Seller will sign the Sales Agreement.

Do I need to have the Sales Agreement witnessed by a third party?

Not all jurisdictions require that a Sales Agreement contain witness signatures, but one or two witnesses when the Sales Agreement is signed is better evidence that the parties entered into this agreement if the matter goes to litigation.


 

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