Sales conditions are the circumstances under which a company sells its product or service. This is often something simple, like what the delivery schedule will be, or when payment is due. Usually, sales conditions are the same as, or are included in, general terms and conditions.
Limiting Risk with Sales Conditions
It’s important for your sales conditions to match your business situation. A retail business will probably have different needs and conditions than a service provider. A service provider, for example, wouldn’t need to include a provision about recalled goods. If your situation or business model is complex, you should have any sales conditions checked by a legal professional to make sure the conditions you’re using work for you. Remember, using the right sales conditions is all about limiting business risk. If something goes wrong, your company should be able to fall back on carefully tailored sales conditions.
What is Included in Sales Conditions?
While your sales conditions can, and should, be written for your business’ needs, there are some common elements.
- Delivery Agreement
- Payment Terms
- What to do in case of Force Majeure (circumstances beyond your control)
- Provisions on Retention of Title
- Seller Liability
- Warranty Period
- How Complaints are Handled
- Laws that Apply in Case of Conflict
- Standards for Agreement Termination
Purchasing Conditions vs Sales Conditions: which ones apply?
What happens if both you and your customer or client want to apply conditions? In case of dispute, which agreement will take precedence? The short answer is: it depends.
How was the original contract written? If you both want to apply conditions, a contract can be written with a hierarchy in mind. Depending on the business risk of both parties, a contract can list some elements in favour of one party while other elements favour the other. This is an efficient, open way to avoid future problems.
It also might depend on local laws. Dutch laws, for example, tend to favour the creditor, while in other places it depends on what order the agreements were signed or validated. In some locations the first agreement is given precedence but in others the courts view the second agreement as a ‘counter-offer’ or an ‘update’ to the first agreement and will favour that one.
Do you need to adjust your sales conditions based on a seller’s location? While it’s not required, you can provide a copy of your sales conditions in a language that your seller understands well. Even if they speak English, making sure there’s a copy of the document in their preferred language can help you avoid miscommunication later.