Table of Contents
What are my options?
1.Draft a Manufacturing Agreement
2.Create a Sale of Goods Agreement
What is the B2B selling process?
It is commonly known as the business to business selling process that occurs when one business sells specific goods or services to another business rather than selling them to direct consumers.
The selling process involves:
- Identifying potential customers and reaching out
- Identifying their problems and offer solutions
- Face to face meeting
- Close the deal
- Post-sales support and measure results
Here are the options
Option 1: Draft a Manufacturing Agreement
A Manufacturing Agreement is a contract between two parties for the manufacture and sale of goods. It sets out clearly the type, quantity, and specifications of the goods to be manufactured, as well as the purchase price and payment terms. It also sets out any minimum purchase obligations, warranties given in respect of the goods, and how title and risks in those goods pass.
These are the important things that should be included in a Manufacturing Agreement:
- Product Specification: A well-written product specification will help both parties to avoid error, save time and cost which ultimately leads to better growth of any business.
- Duration of the agreement: This is the time period of the agreement. Normally it ranges from 1 to 5 years. The duration can be extended upon mutual consent once the term of an agreement is over.
- Payment terms: This includes detail about the payment terms. It can be a lump sum amount, installment, or payment cycle.
- Confidentiality: Both parties should not leak any confidential information that may hamper the organization in any possible way.
- Logistics information: A clear detail about shipping and logistics will help both parties to save time and money by tracking the shipment and getting the delivery on time.
- Clause for damaged goods: A product can get damaged during the shipment process, so it should be made clear in the agreement, who is going to cover for the damage.
- Termination: This includes the terms and conditions under which the agreement can be terminated. Normally a repeated breach of contract and poor quality of goods can lead to contract termination.
Need to draft one now?
Option 2: Issue a Sale of Goods Agreement
A Sale of Goods Agreement is a contract between two parties governing the terms for the sale and purchase of goods. It defines the responsibilities of the buyer and the seller and establishes the terms on which a seller sells and transfers goods to a buyer. And, it also sets out the exact nature of the goods, as well as price and payment terms and what happens at the end of the contract.
A Sale of Goods Contract is a formal contract or agreement between buyer and seller to regulate the buying and selling of goods in a legal manner to avoid disputes in the future. This will help both parties to protect their rights and avoid fraud in day-to-day business. These are the main things that should be included in a Sale of Goods Agreement.
- Buyer & Seller: In any valid Sale of Goods Agreement, there must be two parties involved. One is responsible for selling the goods known as sellers and another is the purchaser of those goods known as buyers.
- Date of the Agreement: This is the date on which the agreement is signed by both parties. I.e.; buyer and seller.
- Description of goods: A proper description of goods along with the quantity that has been already discussed in the agreement should be clearly written to avoid any confusion.
- Purchase price: This is the purchase price of the goods that have been agreed upon by both parties. Once the agreement is signed, the purchase price will remain fixed and cannot be changed throughout the agreement period.
- Shipping Details: Shipping and delivery details are important to serve the buyer and transfer the ownership of the goods. Normally bulk or regular purchase order requires shipping and delivery details.
- Risk of loss: Once the goods are shipped from the seller side, if anything happens in the transit then it will come under buyer responsibility.
- Inspection of goods: The buyer has the right to inspect the goods and can ask for an exchange or refund if the goods are not as per the standard that has been agreed upon.
- Taxes: after shipping the goods from the seller’s side, it is the buyer’s responsibility to pay all the taxes.
- Payment method and deadline: The information about payment method, deadline for making payment, and interest accrued for late payments should be clearly written in a Sale of goods contract.
- Termination of contract: Termination arrangement and provision should be clearly discussed while creating a sale of goods contract. This will help both parties to terminate the contract legally if they are not satisfied with the service offered. Normally a notice period is decided by both parties before terminating the contract.
- Sale of Goods Agreement: If you want a shorter, more succinct version, you can use a Sale of Goods Contract.
Need to draft one now?
Client case study
Alfons Futterer from NanoMatriX International Limited uses Zegal to form contract between a buyer and a seller for the sale and purchase of goods.