Sales contract
This Sales Contract (the “Contract”) is made on [Contract date] between:
[Seller legal name], with its principal office at [Seller address] (the “Seller”); and
[Buyer legal name], with its principal office at [Buyer address] (the “Buyer”).
1. Goods
The Seller agrees to sell, and the Buyer agrees to buy, the following goods (the “Goods”): [Description of goods], quantity [Quantity], meeting the specifications in Schedule A or, if none are attached, the Seller's published specifications for those Goods at the date of this Contract.
The Seller may make minor changes to the Goods that are required by law or that do not materially affect their quality, performance or appearance, after telling the Buyer.
2. Price and taxes
The total price for the Goods is [Total price] [Currency] (the “Price”), which [includes / does not include] packaging, loading, freight and insurance as set out in section 4.
The Price does not include sales, goods and services, value-added or similar taxes, customs duties or import fees, which the Buyer will pay in addition, unless the Buyer provides a valid exemption certificate. The Seller will show applicable taxes, such as GST/HST in Canada or state sales tax in the US, on its invoice.
3. Payment
The Buyer will pay a deposit of [Deposit amount] on signing this Contract and the balance [on delivery / within Number days of the invoice date / before shipment] by [bank transfer / cheque / card / other agreed method].
Overdue amounts bear interest at [1.5 percent per month (18 percent per year)] or the maximum rate permitted by law, if lower, from the due date until paid. The Seller may suspend delivery while any undisputed amount is overdue, after giving 5 business days' written notice.
The Seller will not change the bank account details it uses for payment except by written notice signed by an authorized officer, and the Buyer should confirm any change by telephone using a number it already has on file before paying.
4. Delivery
The Seller will deliver the Goods to [Delivery address] on or about [Delivery date] under the following delivery terms: [Delivery terms, for example FCA Seller's premises or DAP Buyer's premises, Incoterms 2020]. If no delivery terms are stated, delivery takes place when the Goods are made available to the Buyer at the Seller's premises.
Delivery dates are estimates unless the parties have agreed in writing that time of delivery is of the essence. The Seller will tell the Buyer promptly about any expected delay. If delivery is delayed by more than [30] days for reasons within the Seller's control, the Buyer may cancel the undelivered portion by written notice and receive a refund of any amounts paid for it.
The Seller may deliver in instalments, and each instalment may be invoiced separately. A problem with one instalment does not entitle the Buyer to cancel the others unless it substantially impairs the value of the whole Contract.
5. Title and risk
Risk of loss or damage passes to the Buyer on delivery under section 4. Title (ownership) to the Goods passes to the Buyer [on delivery / when the Seller has received full payment of the Price].
Where title passes only on payment, until then the Buyer will keep the Goods insured, store them so they are identifiable as the Seller's property, and not sell them except in the ordinary course of business. The Seller may register its interest under the applicable personal property security legislation in Canada or the Uniform Commercial Code in the US, and the Buyer will sign any documents reasonably required.
6. Inspection and acceptance
The Buyer will inspect the Goods within [10] business days after delivery. If any Goods are damaged, short-shipped or do not meet the specifications, the Buyer will notify the Seller in writing within that period with reasonable details and photographs where possible.
If the Buyer does not give notice within that period, the Goods are deemed accepted, except for defects that could not reasonably have been found by inspection, which remain covered by the warranty in section 7.
For properly rejected Goods, the Seller will, at its option and cost, repair or replace them within a reasonable time or refund the Price paid for them. The Buyer will make rejected Goods available for collection.
7. Warranty
The Seller warrants that, for [12] months from delivery (the “Warranty Period”), the Goods will be free from material defects in materials and workmanship, will conform to the specifications, and will be delivered with good title, free of any lien or security interest other than one under section 5.
The warranty does not cover defects caused by normal wear and tear, misuse, accident, improper installation or storage, modification not authorized by the Seller, or failure to follow the Seller's written instructions.
If a warranty claim is valid and notified within the Warranty Period, the Seller will, at its option, repair or replace the defective Goods or refund the Price paid for them. This is the Buyer's sole remedy for breach of warranty, except as stated in section 9.
Except as stated in this Contract, and to the extent permitted by law, the Seller disclaims all other warranties and conditions, express or implied, including implied warranties or conditions of merchantability or merchantable quality and fitness for a particular purpose, whether arising under sale of goods legislation, the Uniform Commercial Code or otherwise.
8. Cancellation
The Buyer may cancel an order for Goods that are not custom-made by written notice before shipment, subject to a cancellation fee of [Percentage] percent of the Price of the cancelled Goods, which the parties agree is a genuine pre-estimate of the Seller's costs. Custom or made-to-order Goods may not be cancelled once production has started.
Either party may end this Contract by written notice if the other materially breaches it and does not fix the breach within 15 days after notice, or becomes insolvent or bankrupt.
9. Limitation of liability
Neither party is liable to the other for any indirect, incidental, special or consequential damages, or for loss of profit, revenue or business, even if advised of the possibility.
Each party's total liability under this Contract is limited to the Price. These limits do not apply to the Buyer's obligation to pay the Price, to liability for death or personal injury caused by negligence, to fraud, or to any liability that cannot be limited by law.
10. Force majeure
Neither party is liable for failure or delay in performing (other than payment) caused by events beyond its reasonable control, such as natural disasters, epidemics, war, civil unrest, government action, labour disputes not involving its own workforce, or failures of carriers or utilities. The affected party will notify the other promptly and use reasonable efforts to resume performance. If the delay continues for more than [60] days, either party may cancel the affected part of the Contract without liability.
11. International sales
If the Seller and Buyer have places of business in different countries, the parties [exclude / do not exclude] the application of the United Nations Convention on Contracts for the International Sale of Goods, which otherwise applies by default to sales between businesses in Canada and the US.
12. Governing law and disputes
This Contract is governed by the laws of [Province or state] and the federal laws of [Country] that apply there, without regard to conflict-of-laws rules that would apply the law of another place.
If a dispute arises, the parties will first try in good faith to resolve it by discussion between people with authority to settle it, for at least 30 days after one of them gives written notice describing the dispute. If the dispute is not resolved in that time, either of them may start proceedings in the courts located in [City, Province or state], and each submits to the non-exclusive jurisdiction of those courts.
Nothing in this section prevents anyone from seeking urgent injunctive or other interim relief from any court with jurisdiction to protect confidential information, intellectual property or property, or to prevent irreparable harm.
13. Notices
Any notice under this Contract must be in writing and delivered by hand, by courier, by registered mail, or by email to the address shown in the signature block or another address given by notice.
A notice is received: when delivered, if delivered by hand or courier on a business day before 5:00 PM local time at the place of receipt, and otherwise on the next business day; on the fifth business day after mailing, if sent by registered mail; and when sent, if sent by email before 5:00 PM local time of the recipient on a business day with no automated message that it was not delivered, and otherwise on the next business day.
Routine operational communications may be sent by any reasonable means, but a notice of breach, termination or a claim must also be sent by a method listed above.
14. Entire agreement and general terms
Entire agreement. This Contract, including any schedules and documents it expressly refers to, is the entire agreement about its subject matter and replaces all earlier discussions, proposals and agreements about that subject matter, whether written or oral.
Amendments and waivers. A change to this Contract is effective only if it is in writing and signed by each party. A failure or delay in enforcing a right is not a waiver of it, and a waiver of one breach is not a waiver of any other breach.
Assignment. No party may assign this Contract without the prior written consent of the others, which will not be unreasonably withheld, except that an organization may assign it without consent to a successor to all or substantially all of its relevant business or assets by giving written notice. This Contract binds and benefits the parties and their permitted successors and assigns.
Severability. If any provision is found invalid or unenforceable, it will be limited or removed to the minimum extent necessary, and the rest of this Contract stays in full force.
Interpretation. Headings are for convenience only. The words “including” and “includes” mean “including without limitation”. Amounts are in [Currency] unless stated otherwise. A reference to a law includes any amendment or replacement of it.
Language. The parties have expressly required that this Contract and all related documents be drawn up in English. Les parties ont expressément exigé que la présente entente et tous les documents connexes soient rédigés en anglais.
15. Counterparts and electronic signatures
This Contract may be signed in any number of counterparts, each of which is an original and all of which together form one document.
The parties agree that this Contract may be signed and delivered electronically, including through an electronic signature service such as eSora Sign. An electronic signature, and a signed copy delivered by email or as a PDF, has the same legal effect as a handwritten signature on a paper original, to the extent permitted by applicable law, including the U.S. Electronic Signatures in Global and National Commerce Act (ESIGN) and the Uniform Electronic Transactions Act (UETA) as adopted in the relevant state, Part 2 of the Personal Information Protection and Electronic Documents Act (PIPEDA), and provincial electronic commerce legislation in Canada.
Each party consents to receive this Contract and related notices electronically, and agrees that the electronic record of the signing process, including any certificate of completion and audit trail, may be used as evidence that this Contract was signed and of when it was signed.
Schedule A: Specifications
Item: ______________________________
Model or part number: ______________________________
Specifications or drawings referenced: ______________________________
Packaging and labelling: ______________________________
Signatures
By signing below, each signer confirms that they have read and agree to this Contract and, where they sign for an organization, that they are authorized to bind it.
SELLER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________
BUYER
Organization: [Legal name of organization]
Name: ______________________________
Title: ______________________________
Signature: ______________________________
Date: ______________________________
Email for notices: ______________________________