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By David Ewen

How contracts and sales agreements protect buyers and sellers

A sales agreement is a contractual understanding between a buyer and seller of personal or commercial property items. The purpose of having a firm sales agreement in writing is to clarify the terms of the agreement of the identified product or service being sold. A product is easily identifiable in a sales agreement based on a number associated with a registration, SKU, license or serial number. Services being sold are more complex in that the terms must be identified by levels of service at the frequency offered and other elements that are specific as to what would be offered for a given price.

The sales agreement between a buyer and seller clearly dictates the deliverables to be paid within a given time period. There is also the inclusion of a warranty or return policy in the event satisfaction is not met by the buyer. The seller provides the incentive to buy by offering the option of a warranty and return policy; however, it is dictated in such a way that it is not too costly. This includes strict guidelines as to how the warranty is presented and the conditions associated with the policy for returning merchandise. This incentive intends to make the seller feel protected from a flawed delivery of product or service.

A contractual agreement between a buyer and seller identifies specifically who the buyer and seller are, indicating that a purchase-and-sale agreement is between two specific parties. The specific level of service being offered for quantity of products is clearly identified and notated in the agreement. In addition, the delivery of products or services is also identified, indicating the complete closure of the sale. The date of closure must be identified, allowing the buyer to acknowledge or decline satisfaction. This time period also begins the warranty period, which has a designated expiration date. The warranty period is in some way a continued relationship between the buyer and seller as the buyer has an opportunity to evaluate if what was to be delivered was met.

A warranty on products and services satisfy laws that are specific to different industries. The purpose is to protect the consumer or buyer from receiving inadequacies associated with what was indicated in a sales agreement. The warranty also offers the opportunity for the seller to meet expectations outlined in the sales agreement in the event any shortcomings are encountered. The warranty protects both sides in ways to ensure the sales agreement is adhered to and that the transaction of selling a product or service to a buyer complies with the sales agreement.

The sales agreement reflects an expectation and is documented in such a way that it holds important elements. The first is the identification of the buyer and seller. Next is the identification of deliverables offered and the time to be presented. At the conclusion of the sales and delivery of the product or service, the warranty period begins for a designated duration of time.

The sales agreement outlines how warranty-related issues are addressed in the event a return or exchange is required. In the event of a service-related issue, the warranty indicates how such a situation is resolved. At the conclusion of the entire sales process, including the warranty, the seller is given the opportunity to deliver a product or service and the buyer receives the product or service where both parties meet expectations.

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