Sales Contract Template for UK Businesses
Whether you sell products or services, a proper sales contract protects your revenue and defines your obligations. Here is what UK businesses need to include.
Last updated: February 2025
What Is a Sales Contract?
A sales contract is a legally binding agreement for the sale of goods or services. For B2B sales in the UK, the Sale of Goods Act 1979 implies certain terms about quality, fitness for purpose, and description. A written sales contract allows you to define these terms explicitly rather than relying on statutory defaults.
- Describes the goods or services being sold, including specifications and quantities
- Sets out the price, payment terms, and any applicable taxes including VAT
- Defines delivery arrangements, risk transfer, and title retention
- Includes warranties, limitation of liability, and dispute resolution provisions
Title Retention (Romalpa) Clauses
A title retention clause (also called a Romalpa clause or reservation of title) means you retain ownership of goods until they are paid for in full. This is critical for protecting your business if the buyer becomes insolvent — without it, you become an unsecured creditor.
- Simple retention of title: ownership passes only when the specific goods are paid for
- All-monies retention: ownership does not pass until all outstanding debts from the buyer are paid
- The buyer must store retained goods separately and identifiably where possible
- You must have the right to enter the buyer's premises to recover retained goods
Warranties and Remedies
Warranties are promises about the quality, performance, or characteristics of what you are selling. In B2B contracts, you can limit or exclude certain warranties, but the implied terms of satisfactory quality and fitness for purpose under the Sale of Goods Act 1979 can only be excluded if reasonable.
- Distinguish between conditions (breach allows termination) and warranties (breach allows damages only)
- Limit warranty periods to a defined timeframe — 12 months from delivery is common
- Define the remedies available: repair, replacement, refund, or credit
- Exclude liability for misuse, modification, or failure to follow instructions
Key Takeaways
- Title retention clauses are essential for protecting your business if a buyer fails to pay or becomes insolvent.
- In B2B sales, the Sale of Goods Act 1979 implies terms about quality and fitness that can only be excluded where reasonable.
- Clear warranty terms with defined remedies and time limits prevent disputes and manage customer expectations.
Frequently Asked Questions
When does ownership of goods transfer to the buyer?
Under the Sale of Goods Act 1979, ownership transfers when the parties intend it to transfer. Without a contract clause specifying otherwise, ownership usually passes when the goods are delivered. A retention of title clause overrides this by keeping ownership with the seller until payment is received.
Do I need to charge VAT on B2B sales?
If you are VAT registered, you must charge VAT on most sales of goods and services within the UK. The standard rate is 20%. B2B customers who are VAT registered can reclaim the VAT. For exports and international sales, different rules apply — zero-rating, reverse charge, or exemption depending on the destination and type of supply.
What if the buyer refuses to accept delivery?
Your sales contract should address this. Typically, the seller can charge storage costs and re-attempt delivery within an agreed period. If the buyer continues to refuse, you may have the right to resell the goods and claim damages for any loss. The contract should also specify at what point the buyer's refusal constitutes a breach.
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Get Started FreeThis is guidance for UK businesses, not legal advice. For complex legal matters, consult a qualified solicitor.
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