Preparing to sell

Set up sales a contract

Guide

A sales contract is an agreement that defines the rights and obligations of both the seller and buyer, and is an essential element in any business selling products and services.

Your business should take legal advice on creating a sales contract and tailor it to suit the specific needs of your business. See choose and work with a solicitor

If a customer pays for an item when they buy it, they automatically accept the terms of the sale at the point of purchase. You can display your policies, terms and conditions and warranties on invoices, bills, your website or in your shop.

The key issue with a sales contract is when it came into existence - when an offer is made and accepted. Unless your terms of trade have been agreed before this, they do not apply. At the same time, anything salespeople have promised is likely to become legally binding if the customer is relying on it. This applies whether a salesperson has agreed something in writing or not.

Unfair trading and consumer protection regulations

You can comply with most sales regulations in one simple step: by avoiding unfair trading and misleading marketing. Although the detailed requirements are extensive, common sense and an honest approach to doing business covers most of the ground.

Under the Sale of Goods Act, any products you sell must at least:

  • match their description
  • be of satisfactory quality and suitable for their purpose

There are similar requirements that apply to the sales of services.

See customer protection

Other key selling laws

If you sell via the internet, by mail order or telephone, the distance selling regulations will apply. These regulations give consumers some rights to cancel purchases.

You should seek legal advice to understand any other regulations that may apply to your particular products or services, eg offering consumer credit (which generally requires a licence) and data protection for customers' personal information.

For more information on consumer protection, consumer credit and terms and conditions of sale, browse selling and the law.

Drawing up a sales contract

Your sales contract should reflect particular aspects of your business and have clear terms and conditions, such as:

  • who the contract is between and what is being bought and sold
  • price and payment terms
  • details of any warranties and any buyer or seller obligations