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PLAYBOOK TEMPLATES

Sales Agreement (Goods Supply Contract)

A Sales Agreement establishes the legal framework for the sale and supply of goods between parties, setting terms for pricing, delivery, and risk transfer. This playbook examines key negotiation points including warranties, payment terms, and remedies for breach.

Termination and Renewal

Why This Matters: Rigid or unclear termination clauses can trap parties in unfavorable agreements or lead to breach disputes.

Negotiation strategy

If you're the Company:

Ensure termination clauses provide flexibility to exit the contract without excessive penalties. Negotiate for reasonable notice periods and clear conditions for renewal.

If you're the Sales Agent:

Secure terms that protect against abrupt termination, ensuring compensation for delivered services. Advocate for automatic renewals with clear opt-out provisions.

Essential elements

1

Termination Notice

Required period for termination notice.
2

Renewal Terms

Conditions for contract renewal.
3

Termination Consequences

Effects post-termination on parties.

Action framework

ACCEPT

Propose edits if notice periods are too short or renewal terms are unclear.

EDIT

Reject if termination terms are overly restrictive or lack mutual benefit.

ADD

Add clauses if termination or renewal terms are missing or incomplete.

PRO TIP

Always align termination and renewal terms with your long-term business strategy to avoid unwanted commitments.

Example clauses

FAVORABLE

Balanced Termination Clause

"The Buyer may terminate this Agreement for convenience upon providing the Seller with thirty (30) days' prior written notice."
NEUTRAL

Standard Renewal Clause

"This Agreement shall automatically renew for successive one-year terms unless either party provides written notice of non-renewal at least sixty (60) days prior to the end of the then-current term."
UNFAVORABLE

Restrictive Termination Clause

"Termination is only allowed upon mutual agreement, with no less than ninety (90) days' notice."

Fallbacks

High-Risk Projects

In high-risk projects, ensure termination clauses allow for quick exit to mitigate potential losses.

Long-Term Partnerships

For long-term partnerships, focus on renewal terms that allow for periodic renegotiation to adapt to changing circumstances.

Jurisdiction-Specific Requirements

Adapt clauses to comply with local laws, ensuring enforceability and compliance with jurisdictional standards.
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