Make sales and services agreements

There is a wide range of contracts that often need to be used in the course of business. Ensure that you only use professionally written agreements to protect your business interests.

Before you enter into a formally binding contract, a Letter of intent (or Heads of terms) can help to set out the key terms of the potential agreement. Meanwhile, a Non-disclosure agreement can ensure that confidential information discussed in the course of negotiations remains confidential. If a service is being provided between two businesses, a Services agreement should set out the terms. When it comes to business expansion, a Distribution agreement, Sales agency agreement or Subcontracting agreement can help you retain some degree of control. At the end of a contract, you'll need to give appropriate notice in a Contract termination letter - or you may decide to transfer the benefits of a contract to another business using a Letter assigning a contract.

Use a Services agreement, when one business provides services to another. Use a services agreement to agree on service levels and to set out formally your arrangement including the services provided, fees, how to change the agreement, termination of the agreement and intellectual property.

If you're appointing an agent to sell your products - or if you are the sales agent yourself - you need to comply with the Commercial Agents Regulations which apply to the relationship between someone appointing an agent (called the 'principal') and the agent appointed to sell the principal's products. A Sales agency agreement will ensure that you both comply with the law. It covers what the agent is allowed to do, the geographical areas or territory, duties of the principal and agent, minimum sales targets, commission and how to end the agency agreement. For further information, read Commercial Agents Regulations.

Businesses that are expanding and wish to market their products in a new area may decide to appoint a distributor. This independent distributor will generally buy your products and resell them in a defined geographical area. A Distribution agreement sets out the range of products to be sold, as well as the distributor's sales targets. It will also detail whether the distributor is the sole seller in a specific area or one of several, and it can specify the markets or geographical areas in which the distributor will operate. Finally, it sets out how the agreement can be terminated.

Make sure that any goods or services you provide are recorded and the payment required for them is recorded in an invoice. Invoices will protect your business' cash flow, maintain records and fulfil your tax obligations. Issue invoices promptly in order to avoid any delay in your customers' making payments. Create your Invoice and for further information, read Invoicing.

With the increase in online sales and digital marketing, it's important for all businesses to be aware of the law on e-commerce. If you sell goods or provide services to other businesses online, you will need to comply with the E-Commerce Regulations. For further information, read E-commerce between businesses.