Sales: Overview, definition, and example
What is sales?
In a contract, sales refers to the transfer of goods, services, or assets from one party (the seller) to another (the buyer) in exchange for payment. A sales clause outlines the terms of that transfer, including what is being sold, how and when ownership passes, pricing, payment terms, and any related warranties, conditions, or limitations.
Why is sales important?
The sales clause defines the heart of the transaction—it lays out the mutual expectations and legal obligations tied to the exchange. It helps prevent disputes by clearly stating what’s being delivered, under what conditions, and for what price. Whether you're selling physical products, digital goods, or services, this clause protects both sides by documenting the commercial terms and avoiding ambiguity.
Understanding sales through an example
A manufacturer enters into a supply agreement with a retailer. The contract includes a sales clause stating that the manufacturer will sell 5,000 units of a specific product at $10 per unit, with delivery to take place within 30 days of the order and payment due within 15 days of delivery. The clause also clarifies that title passes upon delivery and includes a limited warranty on the goods. This structure provides clarity on timing, ownership, and obligations for both parties.
Example of a sales clause
Here’s how a sales clause may look like in a contract:
"Seller agrees to sell, and Buyer agrees to purchase, the goods described in Exhibit A, subject to the terms of this agreement. Title and risk of loss shall pass to Buyer upon delivery. Payment shall be due within thirty (30) days of invoice. All sales are subject to Seller’s standard warranty and return policy unless otherwise agreed in writing."
Conclusion
The sales clause captures the core business deal in a contract. It governs how the exchange happens, under what terms, and with what protections. If you're buying or selling anything under contract, this clause should be precise, clearly worded, and tailored to the type of sale—because it’s often the first place you’ll look if something goes wrong.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.