Sell Goods & Services

Last updated: 2021-05-31 (originally published on 2017-06-20)   — by Alex Tanglao

There is a wide range of contracts that need to be used in the course of doing business, often dependent on the nature of your business and the country in which you are operating.

Before starting any commercial negotiations, it is a good practice to enter into a Confidentiality Agreement, also know as a Non-Disclosure Agreement (NDA), with businesses to whom you may be disclosing sensitive information. It gives you the ability to take legal action if the other party discloses the information to a third party without your consent.

After a preliminary meeting or discussion and before you enter into a commercial relationship, you can use a Letter of Intent (Memorandum of Understanding) to set out the key terms of the future agreement and the next steps. When working closely with another company, you might need a Collaboration Agreement. When you are selling goods, use a Sale of Goods Agreement, and if a service is being provided, use a Supply of Services Agreement. When you are supplying goods to be distributed, or distributing goods for another business, you need a Distribution Agreement, which regulates how much will be paid, when delivery will take place, and when the distributor will take responsibility for the goods.

A Letter of Intent (Memorandum of Understanding) can help to set out the key terms of a potential agreement. A Letter of Intent (Memorandum of Understanding) typically includes details of the proposed agreement, pre-conditions, key obligations, intended signing date, and next steps. This document is not legally binding but it can contain certain legally binding clauses such as confidentiality to protect sensitive information.

A Collaboration Agreement is a binding document that sets the rules for the cooperation between your company and another. This is common when two companies must work together to complete a project, and it establishes how the companies will work together, who will do what, and how the relationship will end.

A legal agreement for the sale of goods or supply of services helps to make your customers aware of their rights and obligations from the moment you start doing business with them. If you are selling goods, you will need a Sale of Goods Agreement. It typically covers the description of what is to be bought, the price, and practical details such as delivery time and returns. Use a Supply of Services Agreement when one business provides services to another. This agreement describes the scope of services provided as well as the service levels, the fees to be paid, and how to terminate the agreement. Working together with a distributor might be a good way to expand your business. A Distribution Agreement can be used to set out terms and conditions of a distribution arrangement. Whether you are the party supplying or distributing the goods or products, it is important that you specify the terms of your cooperation from the start so you can avoid misunderstandings during the course of your relationship.

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