A sales contract is an agreement between a buyer and seller where the seller will sell goods or services to another person (generally the buyer) in return for something (usually money).

Although it isn't a legal requirement that the agreement sets out the rights and obligations of the seller and buyer, it's advisable to do so.

It may seem odd to suggest that private individuals should use sales contracts in connection with their dealings with one another. However, the aim of most contracts is to ensure that there can be no misunderstanding between parties and also to avoid disagreement or disputes at a later stage. A good rule of thumb is that you should use some kind of sales contract for anything that costs more money than you would be comfortable losing. The detail of the contract will depend on how many problems can arise from a sales arrangement and how important you feel those problems are. Important considerations for drafting a sales contract are discussed in this section.