A sales contract for goods covers the goods' description and quantity, price and payment terms, delivery terms and risk-of-loss allocation (shipping terms like FOB origin/destination decide who bears transit loss), inspection and acceptance windows with rejection rights for non-conforming goods, warranties (express, plus the UCC's implied warranties of merchantability and fitness — disclaimable only with conspicuous language), title transfer, remedies and damages (cover, cure rights), and force majeure. The UCC governs goods sales in every state but Louisiana, fills gaps in silent contracts, and requires a writing for sales of $500+ (the statute of frauds).
Sales Contract Template
Reviewed by the Agiled editorial teamUpdated June 2026
Sales of goods are the contract type the law has most thoroughly pre-written: the Uniform Commercial Code fills every gap a silent agreement leaves — price,...
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Full template text
SALES CONTRACT
This Sales Contract ("Contract") is entered into as of _______, 20 ("Effective Date"), by and between:
Seller: __________________, with a business address of ________________________ ("Seller");
Buyer: , with a business address of ________________________ ("Buyer").
Seller and Buyer are collectively referred to as the "Parties."
1. Goods. Seller agrees to sell and deliver to Buyer, and Buyer agrees to purchase and accept, the following goods (the "Goods"): Description: ________________________ Quantity: __________ Specifications: ________________________ [See attached Schedule A for detailed specifications.]
2. Purchase Price. The total purchase price for the Goods shall be $ ("Purchase Price"), calculated at a unit price of $ per . The Purchase Price [includes/excludes] applicable sales tax, duties, and shipping costs. Any taxes, duties, or fees not included in the Purchase Price shall be the responsibility of [Buyer/Seller].
3. Payment Terms. Buyer shall pay the Purchase Price as follows: (a) A deposit of $ due upon execution of this Contract; (b) The balance of $ due [upon delivery/within __________ days of invoice date/net __________ days]. Payment shall be made by [check/wire transfer/ACH/other]. Late payments shall accrue interest at the rate of __________% per month.
4. Delivery. Seller shall deliver the Goods to ________________________ on or before _______, 20. Delivery shall be [FOB Origin/FOB Destination]. Risk of loss shall pass to Buyer upon [shipment/delivery]. Seller shall notify Buyer of the shipment date and provide tracking information. If Seller fails to deliver by the delivery date, Buyer may extend the deadline or cancel the order.
5. Inspection and Acceptance. Buyer shall have __________ days after delivery to inspect the Goods and notify Seller of any defects or non-conformities. If Buyer does not provide written notice of rejection within the inspection period, the Goods shall be deemed accepted. If Buyer rejects the Goods, Seller shall, at Seller's option, repair, replace, or refund the Purchase Price for the rejected Goods within __________ days.
6. Warranties. Seller warrants that: (a) The Goods shall conform to the specifications set forth in this Contract; (b) The Goods shall be free from defects in materials and workmanship for a period of __________ [months/years] from the date of delivery; (c) Seller has good title to the Goods and the right to sell them; (d) The Goods do not infringe any third party's intellectual property rights. EXCEPT AS EXPRESSLY SET FORTH IN THIS SECTION, SELLER DISCLAIMS ALL OTHER WARRANTIES, EXPRESS OR IMPLIED, INCLUDING BUT NOT LIMITED TO IMPLIED WARRANTIES OF MERCHANTABILITY AND FITNESS FOR A PARTICULAR PURPOSE.
7. Limitation of Liability. IN NO EVENT SHALL SELLER'S TOTAL LIABILITY UNDER THIS CONTRACT EXCEED THE PURCHASE PRICE ACTUALLY PAID BY BUYER. IN NO EVENT SHALL EITHER PARTY BE LIABLE FOR INDIRECT, INCIDENTAL, CONSEQUENTIAL, SPECIAL, OR PUNITIVE DAMAGES, REGARDLESS OF THE CAUSE OF ACTION OR THE THEORY OF LIABILITY.
8. Title. Title to the Goods shall pass from Seller to Buyer upon [payment in full/delivery/shipment]. Until title passes, Seller retains a security interest in the Goods to secure payment of the Purchase Price.
9. Force Majeure. Neither Party shall be liable for delays or failures in performance resulting from causes beyond its reasonable control, including but not limited to natural disasters, war, terrorism, strikes, government actions, pandemics, or supply chain disruptions. The affected Party shall notify the other Party promptly and take reasonable steps to mitigate the impact.
10. Default and Remedies. If either Party breaches this Contract and fails to cure the breach within __________ days of written notice, the non-breaching Party may: (a) Cancel this Contract; (b) Pursue damages for the breach; (c) Exercise any other rights available under applicable law. Buyer's remedies for defective Goods are limited to the repair, replacement, or refund described in Section 5.
11. Confidentiality. Each Party shall treat as confidential all pricing, specifications, and business information received from the other Party in connection with this Contract. Confidential information shall not be disclosed to third parties without prior written consent, except as required by law.
12. Governing Law. This Contract shall be governed by and construed in accordance with the laws of the State of __________, including the Uniform Commercial Code as adopted in that state. Any disputes shall be resolved in the courts of __________ County.
13. Notices. All notices under this Contract shall be in writing and delivered personally, by certified mail, or by overnight courier to the addresses set forth above.
14. Entire Agreement. This Contract constitutes the entire agreement between the Parties regarding the sale of the Goods and supersedes all prior negotiations, proposals, and agreements. This Contract may only be amended in writing signed by both Parties.
15. Signatures.
Seller: ________________________ Date: __________
Buyer: ________________________ Date: __________
- Governing law
- UCC Article 2 (goods)
- Writing required
- $500+ (statute of frauds)
- Risk of loss
- Follows the shipping term
- Implied warranties
- Ride along unless disclaimed
What your sales contract should cover
Goods, described
What's sold, precisely: specifications, model/part numbers, quality standards, and quantity — with quantity the one term the UCC can't fill (a contract silent on quantity fails). Output and requirements contracts ('all we produce'/'all you need') are valid quantity terms with good-faith limits.
Price and payment
The price, payment timing (on delivery, net-30, deposit structures), and the credit terms machinery for ongoing accounts: credit limits, late interest (1–1.5%/month), and security where warranted (a purchase-money security interest in the goods sold, perfected by filing, puts the seller ahead of other creditors if the buyer fails).
Delivery and shipping terms
Where, when, and on whose truck — with the term of art doing the heavy lifting: FOB origin (risk passes when the carrier picks up; the buyer owns transit risk) versus FOB destination (the seller owns it to the door). For international sales, Incoterms (EXW, FOB, CIF, DDP) do the same job with more granularity.
Risk of loss
The clause everyone discovers during a freight claim: who bears the loss when goods are damaged in transit follows the shipping term, not intuition — and insurance should follow the risk. A buyer on FOB-origin terms with no cargo coverage is self-insuring every shipment.
Inspection and acceptance
The buyer's right to inspect before acceptance, the window (5–15 days typical), and the rejection mechanics: non-conforming goods rejected by timely notice, held with reasonable care for the seller's instructions. Silence past the window, or use of the goods, is acceptance — with only the narrower revocation remedy after.
The seller's cure right
The balancing clause: a seller notified of non-conformity may cure within the contract time (and sometimes beyond it, with reasonable grounds) — replacing or repairing before the buyer may cancel. Cure rights keep one bad pallet from unwinding a relationship.
Warranties, express and implied
Express warranties (specs, samples, and affirmations made — they're warranties whether labeled or not), plus the UCC's silent riders: merchantability (fit for ordinary purposes — attaches to every merchant sale) and fitness for a particular purpose (when the seller knows the buyer's use and the buyer relies). Both disclaimable — only with conspicuous language ('AS IS' or naming merchantability).
Remedies and limitations
The remedy architecture: the buyer's cover right (buy substitutes, charge the difference), the seller's resale remedy, repair-or-replace as an exclusive remedy where negotiated (with the failure-of-essential-purpose backstop), consequential-damages exclusions (enforceable, and standard), and any liquidated amounts for defined breaches.
Title and security
Title passes per the contract (typically on delivery or payment) — and the seller selling on credit should know title retention alone is weak protection: the UCC converts 'title stays with seller' into a security interest that needs filing to beat other creditors. The PMSI filing is the real protection.
Force majeure and the battle of forms
Excused performance for genuine impossibility (with notice and mitigation duties), and — for businesses trading on POs and acknowledgments — the battle-of-forms reality: conflicting boilerplate doesn't kill the deal under the UCC, but whose terms govern is decided by rules nobody reads. A signed master agreement beats dueling forms.
Sales contract defaults and standards (UCC, 2026)
| Item | Standard / default | Notes |
|---|---|---|
| Writing threshold | $500+ | UCC statute of frauds |
| FOB origin | Buyer bears transit risk | Risk passes at pickup |
| FOB destination | Seller bears transit risk | To the door |
| Inspection window | 5 – 15 days | Contract-set; reasonable time default |
| Late payment interest | 1 – 1.5% / month | On credit accounts |
| Warranty disclaimer | Conspicuous writing | 'AS IS' or naming merchantability |
| Consequential damages | Commonly excluded | Enforceable between merchants |
The UCC governs goods in 49 states (Louisiana differs); services contracts follow common law instead — mixed deals follow the predominant purpose. International sales may default to the CISG unless excluded.
How sales contracts work in practice
The equipment purchase
A business buys a $60,000 machine: the contract's pressure points are conformity and remedy. The spec sheet attached as the conformity standard (the express warranty that matters most), delivery FOB destination with installation and a defined acceptance test (the machine runs to spec for N days — converting 'inspection' from a glance into a measurement), the seller's repair-or-replace warranty for 12 months as the exclusive remedy, and the consequential exclusion both ways — the buyer's lost production isn't the seller's exposure, which is precisely why the acceptance test before final payment matters so much. Deposit structures track the build: 30% down, balance at acceptance.
The recurring supply relationship
A manufacturer buys components monthly on POs: the battle of forms in its natural habitat — the buyer's PO terms and the seller's acknowledgment terms conflicting politely for years until a defect makes the differences matter. The fix is the master sales agreement: one negotiated set of terms (specs, pricing mechanics, delivery, inspection, warranty, limitation) that all POs incorporate, with the PO reduced to quantity, date, and price. Add the relationship machinery: forecast and lead-time terms, price-adjustment formulas tied to indices rather than renegotiation, and the rejection-and-cure protocol that handles the bad lot without lawyers.
The transit loss
The shipment arrives crushed: the two-word clause now allocates the whole invoice. FOB origin — the buyer's loss the moment the carrier signed for clean freight; the buyer's claim runs against the carrier (with its capped liability) and the buyer's own cargo policy, while still owing the seller the price. FOB destination — the seller's problem entirely: replace the goods, claim against the carrier themselves. The practice notes the clause implies: whoever bears transit risk buys cargo insurance (carrier liability caps make freight claims partial recoveries at best), the receiver notes visible damage on the delivery receipt before signing, and concealed-damage claims move within the carrier's short windows (often 5 days).
Mistakes that weaken a sales contract
Silence on the shipping term
No FOB term means UCC defaults pick the risk-bearer — and nobody bought insurance for a risk they didn't know they held. Two words, deliberately chosen, with cargo coverage to match.
Disclaiming warranties quietly
Merchantability survives any disclaimer that isn't conspicuous — buried small-print 'as is' fails. Bold, capitalized, naming merchantability: the formality is the enforceability.
Using the goods, then rejecting
Acceptance happens by conduct: putting goods into production waives rejection and leaves only the harder revocation path. Inspect inside the window; reject by written notice; touch nothing more.
Title retention without a filing
'Title remains with seller until paid' converts, under the UCC, into an unperfected security interest other creditors beat. The PMSI filing is cheap; the unsecured-creditor line is not.
Trading on dueling forms
Years of POs versus acknowledgments leaves the governing terms to battle-of-forms rules nobody intended. One master agreement, incorporated by every PO, ends the war before the dispute.
How to use this template
- 01
Download the sales contract template in Word or PDF.
- 02
Describe the goods and quantity precisely — specs attached as the standard.
- 03
Set price, payment, and credit terms (with a PMSI filing for credit sales).
- 04
Choose the shipping term deliberately and match insurance to the risk.
- 05
Set the inspection window, rejection mechanics, and cure rights.
- 06
State warranties and disclaimers conspicuously, cap remedies, and sign.
Skip this template if…
- Services engagements — common law, not the UCC, governs services; use a service agreement with scope and milestone terms.
- Real estate — land and buildings transfer under purchase agreements with title, escrow, and recording machinery.
FAQs
What should a sales contract include?
The goods described with specs and quantity (the one term the law can't fill), price and payment terms, a deliberate shipping term allocating transit risk, an inspection window with rejection and cure mechanics, express warranties plus any conspicuous disclaimers of implied ones, remedy limitations, and title/security terms for credit sales. The UCC fills whatever's left silent — with defaults you may not want.
Does a sale of goods need to be in writing?
At $500 or more, yes — the UCC's statute of frauds requires a writing signed by the party being held to it, with merchant exceptions (a confirming memo unobjected to within 10 days binds both merchants). Below the threshold oral deals bind but prove badly. The practical rule: paper everything that matters.
What does FOB mean in a sales contract?
'Free on board' — the term that allocates transit risk: FOB origin passes risk to the buyer when the carrier picks up (buyer insures transit, claims against the carrier); FOB destination keeps risk on the seller to the door. The two words allocate the full shipment value, and insurance should always follow the risk. International deals use Incoterms for finer gradations.
What are implied warranties in a sale of goods?
The UCC's silent riders: merchantability (goods fit for their ordinary purpose — attaches to every sale by a merchant of that kind) and fitness for a particular purpose (when the seller knows the buyer's specific use and the buyer relies on the seller's judgment). Both are disclaimable, but only with conspicuous language — 'AS IS' in bold, or a disclaimer naming merchantability. Quiet fine print fails.
What can a buyer do about defective goods?
Inspect within the window and reject non-conforming goods by timely written notice, holding them for the seller's instructions — subject to the seller's right to cure within the contract time. After acceptance, the remedies narrow: revocation for substantial defects that were hard to discover, warranty claims, and cover (buying substitutes and charging the difference). Using goods in production generally accepts them — inspect before integrating.
Can a seller protect itself when selling on credit?
Yes — properly: a purchase-money security interest (PMSI) in the goods sold, granted in the contract and perfected by a UCC-1 filing, puts the seller first in line on those goods even against the buyer's bank. Title-retention language alone doesn't do it — the UCC converts it into an unperfected interest that loses to filed creditors. Add credit limits, interest terms, and personal guarantees where the account warrants.
Pair it with the sales invoice template
The contract sets the terms — the invoice collects on them. Free download with the right line items pre-filled.
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