A sales contract is a crucial document that defines the terms and conditions of a business deal between a seller and a buyer. It can have a significant impact on the success and profitability of your technical sales process. Therefore, it is essential to review it carefully and thoroughly before signing it. Here are some of the most important tips for reviewing a sales contract.
The first tip is to understand the scope of the contract, which means what products or services you are offering, how they will be delivered, and what outcomes or benefits they will provide to the buyer. You should also check if the contract covers any warranties, guarantees, support, maintenance, or training that you are responsible for. Make sure that the scope is clear, accurate, and consistent with your proposal and the buyer's expectations. Avoid any vague or ambiguous language that could lead to confusion or disputes later on.
Indeed, it is better to be sure than to assume. The conditions of the warranty, guarantee. Proper use of product should be stated clearly so as not to affect it's warranty.
The second tip is to review the terms of the contract, which means the legal and financial aspects of the deal. You should pay attention to the payment terms, such as the amount, frequency, method, and currency of payment. You should also look at the delivery terms, such as the timeline, milestones, deadlines, and penalties for delays or non-performance. Additionally, you should review the liability terms, such as the indemnification, limitation of liability, and dispute resolution clauses. These terms can affect your risk exposure and cash flow, so you should negotiate them carefully and protect your interests.
The third tip is to verify the compliance of the contract, which means the alignment with the relevant laws, regulations, standards, and policies that apply to your industry, market, or jurisdiction. You should ensure that the contract complies with the applicable tax, trade, data protection, intellectual property, environmental, and ethical rules. You should also ensure that the contract follows the internal policies and procedures of your organization, such as the approval process, authorization level, and documentation requirements. Compliance can help you avoid legal troubles and reputational damage.
I agree completely, in other words 'cover your back'. Ensuring that all loopholes no matter how small are covered, will not only save you money but time too. Imagine being sued for a clause that you probably missed or was misconstrued by the next party. The legal implications, the time, the money and defamation of reputation.
The fourth tip is to check the accuracy of the contract, which means the correctness and completeness of the information and data in the document. You should verify that the contract reflects the latest and final version of the agreement between you and the buyer, and that it contains no errors, omissions, or inconsistencies. You should also check that the contract matches the other documents that are part of the deal, such as the purchase order, invoice, receipt, or delivery note. Accuracy can help you prevent misunderstandings and disputes.
The fifth tip is to seek feedback on the contract, which means getting input and advice from other parties that are involved or affected by the deal. You should consult with your legal, financial, technical, and operational teams to ensure that they are aware of and agree with the contract terms and conditions. You should also communicate with your buyer and clarify any questions or concerns that they may have about the contract. Seeking feedback can help you improve the quality and clarity of the contract and build trust and rapport with your buyer.
The sixth tip is to confirm the acceptance of the contract, which means getting the formal and final approval and signature from both you and the buyer. You should ensure that the contract is signed by the authorized representatives of both parties, and that it is dated and witnessed properly. You should also ensure that the contract is stored and shared securely and appropriately, and that it is accessible and enforceable when needed. Confirming the acceptance can help you finalize the deal and start the execution phase.