Terms of Sale - Definition & Example
What is Terms of Sale?
Terms of Sales refer to the agreement between the buyer and seller of goods and services on conditions of price, quality, quantity, delivery, warranty, payment terms and other special conditions. Terms of sale refers to the point where the sellers have fulfilled their obligations so that the goods can be delivered to the buyer. The special conditions include the limitation of liability, refunds policy, Intellectual property rights, assignment and sub-contracting.
In global trade, the guidelines set between the two trading parties is known as the term of sale.
The most prominent guidelines consists of the following:
|
Interpretation |
Inspection |
|
Prices |
Cancellations |
|
Payment |
Warranty |
|
Delivery |
Display and Samples |
|
Title |
Governing law |
|
Risk and Insurance |
Examples of Terms of Sale
The below example of a term of sale document includes the following points in general. This may not be exhaustive list and companies usually changes the terms of sales accordingly-
1. Interpretation – Includes company, customers, goods and general terms of the agreement
2. Prices – According to contract terms prices are agreed upon at the time of order and, prior to payment of the deposit and are subject to changes without prior notice.
3. Payment - Payments have to made mandatorily to the Company without any discount or deduction other than as stated in the Terms or in invoice of relevance
4. Delivery - Within 4 days of notification of their availability, the Customer must have collected or accepted the delivery of the Goods and pay the balance.
5. Title - Legal ownership of the Goods will only pass to the Customers if the agreed amount have been paid in full in cash
6. Risk and Insurance - The risk are transferred to the Customer from the moment of delivery or on collection
7. Inspection - The Goods are assumed to have been accepted in good order and condition until and unless the customer after its inspection has given written notice to the Company within 5 days after collection or delivery
8. Cancellations- Orders booked are not subject to cancellation, modification or deferred without the prior written consent of the Company and is at the Company’s sole discretion to accept or reject the writing.
9. Warranty - Goods supplied are covered under warranties as are specified by the manufacturer and supplied subject to the product standards detailed by the manufacturer
10. Display and Samples - Display product or sample provided to the Customer is only for the convenience of a Customer and does not constitute a sale by sample.
11. Governing law – The terms of agreement will be governed by courts mentioned in the agreement and any disputes will be settled in the mentioned court
Hence, this concludes the definition of Terms of Sale along with its overview.
This article has been researched & authored by the Business Concepts Team. It has been reviewed & published by the MBA Skool Team. The content on MBA Skool has been created for educational & academic purpose only.
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