What Are Common Client Concerns in Sales Agreements?
Sales agreements specify how goods and services are sold. They need to include important terms, such as payment responsibilities and delivery terms. We’ve found that many clients have some common concerns when drafting and reviewing these essential contracts that prevent financial issues and disputes.
In this article, we feature ContractsCounsel data that outlines the most common client concerns when reviewing sales agreements. These include payment terms, commission structures, liability protections, contract language, and legal compliance.
Note: This data comes from real, anonymized project data from ContractsCounsel, an online legal marketplace connecting clients to vetted lawyers for drafting and reviewing sales agreements.
Payment Terms and Buyer Default Protections
Concern 1: Clients usually want their sales agreement to contain transparent payment terms and schedules. There should also be protections if the buyer doesn’t pay.
How lawyers help: Attorneys will explain the payment structures and any penalties that apply for late or missed payments.
Commission Structures and Duration
Concern 2: Clients who have reseller or subscription sales usually seek confirmation about how commissions are calculated and their duration after a sale.
How lawyers help: Lawyers check the commission clauses so calculation methods are accurate. They'll review payment obligations to ensure they’re reasonable and subject to appropriate time limits.
Liability Protections and Risk Allocation
Concern 3: Clients want to limit liability if there is unsatisfactory sales performance. This is a common concern for vendors and sales reps.
How lawyers help: To fairly allocate risk, lawyers will add indemnity and limitation of liability clauses.
Contract Language and Legal Compliance
Concern 4: It’s common for clients to want to ensure that the agreement has clear, specific language while being legally sound.
How lawyers help: Lawyers will go through the contract, checking for transparency and legal compliance with federal and state laws. They will review and adjust the clauses according to the appropriate jurisdiction.
Refunds, Novation, and Performance Clauses
Concern 5: Disputes usually occur because of refund and amendment terms. Clients want clarity on these, while knowing if they can modify the contract and what is considered performance or breach.
How lawyers help: Attorneys structure agreements so refund conditions and performance duties are transparent. All amendments or novation must be correctly executed.
Ownership Stakes and Revenue Sharing
Concern 6: Sometimes, clients want clarity about ownership and revenue-sharing clauses in the agreement, especially if they seem to favor one party.
How lawyers help: To ensure balance and fairness, lawyers will review all the contract’s financial terms. They can negotiate revisions if these are required.
Key Takeaways
- Clients’ main concerns include payment terms, commission structures, and risk allocation.
- Clients also want clarity regarding refunds, performance, and legal compliance.
- Legal review keeps the contract fair and enforceable, while protecting both parties’ interests.
- A lawyer checks the contract meets both parties’ financial and business expectations.
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