5 Types of Sales Contracts to Use in 2022

Written by Timothy Ware

The business world is filled with many different products and services. All of those products and services have their own terms of use. To legally support this varied commerce, there are different types of sales contracts.

While we might not think about them as sales contracts, everything from house lease and car rental agreements to real estate contracts are different types of sales contracts. Even freelance work contracts are really sales contracts.

Sales contracts are also supported by related contracts. For example, non-disclosure (NDAs) and non-compete (NCAs) contracts are often part of large corporate sales deals.

In this article, I’ll go over five common contract types. While these sales contracts are great examples for your business, remember to work with a professional when drafting sale contracts.

If you are looking for some new sales contracts, I’ve compiled a list of some great sales contract templates, and how to personalize them to your needs.

To see how SignTime can help you get your sales contracts signed today, sign up for our free trial now.

What are sales contracts?

Briefly, a sales contract is a legally binding agreement between two (or more) parties agreeing to the terms of a business arrangement.

This can be for the sale of a product or service and is used to make sure that all parties are aware of (and agree to) the different parts of an arrangement. Contracts can be very complicated, but you can save time by using templates. We’ve written on this topic before and we encourage you to take a look.

5 types of sales contracts

After you have successfully closed a sale, you will need to have your contract ready to go. There are so many different types of sales contracts, but here are some examples of sales contracts that are commonly used:

1. Sales agreements
2. Master service agreements
3. Terms of service
4. Government contracts
5. International sales contracts

Sales agreements

Simple sales agreements are one of the most commonly used contracts in business. It’s an agreement between a buyer and a seller. It explains the terms of a sale as well as any information that is important to the arrangement.

Sales agreements are used in most industries around the world and can cover anything from real estate to the purchase of a million pencils. These contracts are usually very similar to each other as they all tend to cover the same sorts of details.

Master service agreements

Similar to a sales contract, a master service contract covers the terms and conditions between parties, but for all future agreements. These are long-term sales contracts.

Having a master service agreement can make life easier for legal departments as they don’t need to negotiate all future contracts. There are many ways in which careful contract preparation and planning can help your team.

Learn how SignTime was able to help HCCR, an HR management consulting firm.

Terms of service

Terms of service (also called “terms and conditions”) are standard agreements that explain how a user can and should (or shouldn’t) interact with a service. These sorts of agreements are very common when using digital products such as software as a service (SaaS) web apps.

Odds are that, if you need to make an account for a service, you’ll need to agree to a terms of service.

If you need a terms of service for your business, you want to make sure that it has at least these three important elements (although most terms of service have many other articles as well):

• A limitation of liability so that you can clarify what your company is not responsible for.
• Clarification of how disputes are resolved. This ensures the method by which disputes are resolved and is beneficial to a company’s legal department.
• Protection of your intellectual property is also important and your company makes it clear that they own the property and that clients are permitted to use (but don’t own) your service.

Government contracts

Generally speaking there are three primary types of contracts that governments use: procurement contracts, federal grants, and cooperative agreements. Each of these contracts is used in different circumstances, so it is important to know which one is applicable to you and your business.

• Procurement contracts are generally for cases where a government enters an agreement with a company in order to receive goods or services from a company.
• Federal grants are a sort of cooperative agreement when the goal of the arrangement is to deliver something of value to a government or a non-profit.
• Cooperative agreements are used when a government might be significantly more involved, unlike federal grants which can be a bit more “hands off.”

International sales contracts

In an increasingly interconnected world, more and more companies aim to do business overseas. International sales contracts are similar to regular contracts, but they fall under the purview of international laws (such as the Vienna Convention).

These contracts clarify methods of dispute, delivery times, products and their prices, and so on. While there are many cases where international goods or services are provided without the need for a contract, they are often recommended so that all parties are aware of expectations.

One particular point to mention in international sales contracts is where any disputes should be resolved, for example the buyer’s country, the seller’s country, or some trusted third-party nation.

Because there can be so many different types of contracts, it’s always a good idea to have a good way to manage your contracts. This article explains why SignTime is the best way to handle electronic contract management.

SignTime’s electronic contract repository is secure and easy to search. You can even digitize your paper contracts to save time, space, and money on contract management.

You might also be interested in this article:
What Is a Electronic Contract and How Can They Revolutionize Your Business?

Use the right type of sales contract to close more sales

Knowing what contract you should use in any given situation is extremely important.

Having a clear understanding of what kind of contract you need shows knowledge and professionalism, and your clients will be happy that you’ve thought ahead.

If you’re looking for the right solution for handling your contracts, we can help you save and send templates of each type of sales contract so they are available when you need them.