Tips for drafting a sales agreement
Sellers of professional or private goods in Switzerland are affected by this issue, whether they are selling to consumers or businesses, for all of the following reasons:
- Because consumer law gives more rights and protection to private consumers
- Because the seller assumes certain objective responsibilities, even without any fault whatsoever
- Because a sale, especially a distance sale, involves the issues of re-invoicing taxes, customs duties, costs and insurance.
- Because the greatest risk for the seller is not being paid, when ownership of the good has already been irrevocably transferred.
- Because the manufacturer, retailer and resellers each bear their own responsibility on a case-by-case basis in the distribution chain.
Owners of websites offering goods for sale or resale in Switzerland are also affected by this issue, as data protection rules are added to the sales rules and are strictly regulated. These rules must be included in the general terms and conditions of sale (GTCS).
This also applies to any private individual who sells second-hand goods privately, since the seller’s liability is not reduced depending on whether he or she is a professional or not.
What is a sales agreement and what types are there?
Sales contracts vary according to:
- Form: an oral sales contract is possible, and many are often concluded, for example in the shop, but written contracts are recommended for distance transactions or for large sums.
It should be noted that acceptance of the general terms and conditions of sale (GTCS) online is legally equivalent to a contract, even if it is not “in writing” as such.
We also offer you a model of the general terms and conditions of sale which can be applied to any sale other than those ordered on a website, and which allows you to conclude only very brief sales contracts, with reference to the GTCS.
- Territory: a distinction is often made between a contract of sale in the same country (without crossing the border) and an international contract of sale. This model allows you to deal with the issues of exporting and importing, re-invoicing customs duties, import VAT and other questions frequently asked in international trade.
- More commonly used by private individuals, the vehicle sales contract is used to sell a new or used car, and thus to specify known defects, the last inspection, or even to impose prior work or modifications.
- Finally, it is possible to sell only subject to the fulfilment of a certain condition. The property is leased to the buyer on a trial basis, against rent or, more generally, free of charge, until such time as the buyer decides whether or not to buy the property back.
Alternatively, the foregoing may be formalised by a contract for the lease of the assets without any real commitment to repurchase, with a subsequent contract of sale that may be entered into by the parties.
- The status of the seller: goods are often marketed not by the seller himself or by retail dealers, but by agents, distributors, business introducers or brokers. For sales in the name and on behalf of the seller, in return for commission, we offer you a model business provider contract.
What are the main mistakes that salespeople can make and how can they avoid them with AdminTech?
If the seller does not draw up a good contract of sale, here are the various errors that can occur:
- Unclear or insufficient description of goods and their characteristics:
It is not necessarily useful to include all the technical details of the goods for sale in the legal text, especially if it is a catalogue. What is more practical, and what we suggest in our templates, is to provide only a brief description, while adding a detailed appendix to avoid any misunderstanding.
- Abuse and misunderstanding of Incoterms:
Established to facilitate international sales, Incoterms identify the obligations and responsibilities of the parties, particularly with regard to transport, delivery and insurance. However, these terms are often confused, not clearly understood by both parties, or the version of Incoterms used is not up to date. For this reason, our templates allow you to select the responsibilities and duties of each party one by one, without ambiguity.
- Omissions in respect of taxes, customs duties, insurance and other charges:
Sales contracts often state only the total price, without even specifying whether this price is exclusive of tax (excluding VAT) or inclusive of tax (including VAT), whether customs duties may be charged in addition, who bears the cost of transport and insurance, if applicable, and for what amounts. Our templates address all these questions, depending on the type of sales contract you have chosen.
- Insufficient specification of deadlines and means in the event of delays:
The parties often fail to specify whether the deadline is strictly necessary or indicative. Our models allow you to specify whether the deadline cannot be exceeded at all, allowing cancellation in the event of the slightest delay, or to stipulate a penalty for delay in order to encourage the seller to perform his obligations to the best of his ability.
As with sales deadlines, payment deadlines need to be fairly precise. Our models are so flexible that they allow you to pay according to an instalment plan, or to pay the guarantee instalments before the sale.
- Defect detection:
Defects can occur suddenly through no fault of the seller, which does not remove his liability, but the parties often fail to provide rules on how to deal with these situations.
Our models allow you to prioritise certain measures over others, for example repair rather than cancellation of the sale. You can also limit the seller’s maximum liability, set a final deadline for reporting any defects or, on the contrary, offer additional guarantees.
- Neglecting the risk of default:
Not only is this the most common risk for any seller, but because ownership has already been transferred, the seller is often in a precarious position. At the very least, you should make use of the following options, which we suggest: fixing payment reminder fees and interest on arrears. However, the best solution is to provide a sufficient advance deposit, which is also possible with our sales contract templates.
- Not preparing general terms and conditions of sale for sales to consumers:
Firstly, they have more rights than professional buyers. Secondly, written contracts are often not concluded or negotiated with consumers – these oral sales leave ambiguity as to the rights and obligations of the parties. So having terms and conditions available, even if they are posted on your website or over the counter, improves the protection of your rights as a seller and gives you clarity and security in your dealings with customers.
To create a more robust sales contract, we recommend using the AdminTech online contract builder.
