Sales contract management: 15+ types, challenges, and specific processes

HubSpot’s State of Sales report from 2024, surveying over a thousand sales professionals, shows that the average sales deal size sits at $4000.

This alone proves that sales are an important department in every business—tying their work directly into revenue.

A big part of working in sales is creating and signing contracts to introduce not only professionalism into deal closing, but also legal protection for both the buyer and the seller.

Sales contract is a legally binding agreement between a buyer and a seller outlining the terms and conditions of each sale—from the price, to terms and conditions, to possible refunds, and more.

In this article, we’ll focus precisely on what makes a good sales contract to cover everything you need to know for efficient sales contract management.

How the process from creating to signing such a contract goes, how it can be improved with technology, and share solutions to most common challenges specific to managing sales contracts.

15+ types of sales contracts

There are many types of sales contracts signed within the sales department that depend on quite a few factors, from the stage of the deal to whether you’re selling products or services.

Selling goods (tangible products)

Contracts for selling products focus on the sale and delivery of the physical items in question. Here, you may be drafting and signing a:

• Purchase agreement: is a type of contract specifying the details of a sale, including price, quantity, quality, and delivery terms. Purchase agreements are most commonly used for large orders of supplies—because standard purchases (e.g., buying office supplies) don’t typically require a formal purchase agreement.
• Sales order contract: a formal confirmation of a customer's purchase request, often issued after an order is placed.
• Bill of sale: a document transferring ownership of goods from the seller to the buyer, often used for one-time transactions.
• Consignment agreement: a contract that states that goods are placed with a third party (consignee) to sell, with payment made once sold. Imagine you make handmade jewelry but don’t have your own store. You give your jewelry to a boutique under a consignment agreement. The boutique (the consignee) will try to sell your jewelry, but you still own the jewelry until it sells.
• Supply agreement: a long-term contract for a supplier to provide goods over a specified period of time.
• Distribution agreement: a contract where a company allows another business to distribute and sell its products. In contrast to a consignment agreement, here, the distributor often pays for the products upfront, not just when making a sale.
• Warranty agreement: specifies the terms of warranties and guarantees related to the product.

Selling services as projects (custom work)

Working with services, especially custom-based projects with varying scope, requires a different set of documents to create, sign, and store.

When working with custom projects, you may find yourself working on:

• Service agreements: a general contract outlining the scope of work, timelines, fees, and responsibilities.
• Statement of Work (SOW): a detailed document specifying the work to be performed, deliverables, and deadlines.
• Master Service Agreement (MSA): MSAs are broader contracts governing multiple projects between two parties, focusing on future agreements. Here, both parties agree to most of the terms outlined by the document to help ease future work on projects. It also helps with spotting and avoiding potential risks in long-term partnerships.
• Consulting agreement: used when hiring consultants for a specific project, covering objectives, fees, and confidentiality.
• Freelancer or independent contractor agreement: contract that outlines the terms of engagement for temporary or project-based work with an external contractor.
• Non-Disclosure Agreement (NDA): signed to provide confidentiality for sensitive business information shared during the project.

Selling services as products (fixed pricing)

Selling services in a more defined manner than custom projects may also require another set of contracts to go for.

These contracts focus on selling one-time services or ongoing service delivery, all in a fixed pricing model, just like products off the shelf.

Think Netflix-like subscriptions or purchasing a set of articles with a defined scope from a copywriting agency.

Here, sales may find themselves working additionally with these contract types:

• Subscription agreement: a contract for recurring services, such as SaaS (Software as a Service) or memberships. It defines payment terms, service access, renewal conditions, cancellation policies, and any usage limits. Not to be confused with an investor's application to join a limited partnership (LP) or an agreement between a company and a new shareholder, which both are called a “subscription agreement” as well.
• Retainer agreement: when a client pays upfront for ongoing services over a set period of time.
• Licensing agreement: which grants permission to use software, intellectual property, or other services under specific terms.

Each type of sales contract works in our favor, offering clarity, legal protection, and structured agreements between parties, depending on the nature of the sale.

But to make it more tangible than just going over the different types of contracts you may find yourself working with in sales, let’s discuss an ideal contract for three types of contracts specific to different pricing strategies you can go for.

What should a perfect sales contract include? 3 examples

Fixed-price sales contract

As we already mentioned, fixed pricing is when you charge a set amount for the delivery of your service, regardless if it’s one-time or ongoing, every time.

Fixed pricing works best for highly-defined services with similar or the same scope—making it easier to not only sell but also deliver such services to customers.

Now, the elements of a sales contract in that case may come with the following clauses to make it the most useful:

• Price & payment terms: clearly state the fixed price and payment schedule (e.g., full payment upon delivery or installments). This prevents misunderstandings about costs and ensures financial predictability for both parties.
• Delivery: define the delivery timeline, method, and conditions for acceptance of services.
• Warranties: specify service quality standards and any guarantees provided. This will help protect the buyer, ensuring that the service meets agreed-upon quality standards.
• Liability: outline responsibilities for defects, damages, or delays and who bears the risk. Limits financial risk for both parties by assigning responsibility in case of unforeseen issues.
• Dispute resolution: establish mechanisms for resolving disputes (e.g., arbitration, mediation). Reduces legal costs and ensures a fair process for handling disagreements.

💡 Fixed sales pricing contracts may become one of the easiest to draft since the level of service and the price stays fixed—you may treat the base contract as a template, reuse it with every new customer.

Cost-plus sales contract

The cost-plus strategy is defined as pricing your goods or services at an agreed profit margin + being reimbursed for the costs of the products or services themselves.

For example, it’s best to use cost-plus pricing when working with custom-based projects—especially when your projects tend to exceed the original scope.

Here, a proper sales contract may need to include some of the following clauses:

• Cost breakdown & pricing formula: define allowable costs (materials, labor, overhead) and the profit margin calculation. This will cover transparency and prevent disputes over how the final price is determined.
• Force majeure: address unforeseen events (e.g., natural disasters, supply chain disruptions) that may impact fulfillment. This provides legal protection in case external factors make it impossible to fulfill the contract.
• Audit & cost verification: grant the buyer rights to review records and verify costs. Helps prevent overcharging and ensures fair pricing.
• Payment terms: specify how and when costs will be reimbursed. Ensures the seller receives timely payments and the buyer manages expenses effectively.
• Scope of work: detail the scope and process for handling project modifications. This prevents confusion about project expectations and provides a structured way to adjust the contract if needed.
• Performance & milestones: set measurable project goals, deadlines, and quality standards. Helps track progress and ensures work is completed as planned.
• Termination clause: define conditions under which either party can terminate the contract. This provides a clear exit strategy if obligations are not met.

Lease-purchase (rent-to-own) sales contract

A lease-purchase or rent-to-own sales contract is a contract where the buyer rents the product with the option to purchase it later. It is most often used in real estate, leasing buildings, apartments, houses, etc.

Given its unique nature, here you may think about adding the following clauses to keep things running well:

• Lease duration & payment terms: define rental period, monthly payments, and due dates. This establishes clear financial commitments and prevents payment disputes.
• Purchase option & price: specify conditions for purchasing, including price and deadline for exercising the option. Adding such a clause provides clarity on how and when the buyer can transition from leasing to ownership.
• Ownership: detail when ownership transfers (e.g., after final payment or early buyout). Avoids confusion about legal ownership and asset responsibility.
• Maintenance & liability: outline responsibilities for repairs, insurance, and damages during the lease term. Protects both parties by defining who is responsible for upkeep and damage costs.
• Termination: state consequences of missed payments or contract violations. Ensures both parties understand the penalties for non-compliance.
• Return conditions: if the buyer does not purchase, define how the product should be returned and in what condition. This prevents disputes over wear and tear or improper returns.

Contract management process: the exact role of sales

But no matter which pricing strategy you’re going for or whether the business you’re in sells services or tangible products—the process from drafting to signing a contract is usually pretty similar.

What’s different are the exact terms & conditions or the clauses you agree on with the second contract party.

Sales department in particular helps to manage contracts in these crucial stages:

5 common challenges in sales contract management + solutions

As we see from the above break-down, sales contract management involves drafting, executing, monitoring, and renewing contracts efficiently.

However, as contract management in general comes with a multitude of challenges (and of course many benefits, too), working with contracts in the sales department is not free of having its own struggles.

Sales may particularly suffer from these challenges when working with contracts.

Lack of standardized contract templates

• Challenge: businesses that don’t keep standardized contract templates, basically require the sales team to reinvent the wheel with contract drafting. This will not only be time-consuming, but it may also lead to legal risks and misinterpretations when inconsistencies are bound to enter the documents.
  
  
• Solution: develop standardized templates with clear terms and conditions to ensure uniformity—at least for the most common/popular cases in your business. You can use a contract management software to store and update the templates more easily.

Lengthy approval processes

• Challenge: contract approvals often take too long due to multiple stakeholders, legal reviews, and manual processes. Every sales rep rolled their eyes at the very thought of having to go through a lengthy approval process when the customer is breathing down their neck and the deal is hanging by a thread already.
  
  
• Solution: several solutions can be applied to make approvals less complicated. You can start using e-signature tools and automated workflow systems to fast-track contract execution (accepting terms and signing will then happen online and documents will often move automatically between stages and stakeholders).
  You can also go for building clearer manual workflows, set KPIs to track the time of contract approval and work on improving it, keep stakeholders accountable in contract approvals, and more.

Inconsistent pricing & payment terms

• Challenge: discrepancies in pricing structures and unclear payment terms can cause revenue losses and strained relationships with clients.
  
  
• Solution: standardize pricing models and payment terms. Moreover, use automated invoicing systems to ensure accurate billing and track overdue payments.

Poor contract storage & retrieval

• Challenge: many companies still use physical documents or disorganized digital files, making it difficult to retrieve contracts when needed.
  
  
• Solution: adopt cloud-based contract management solutions or an electronic signature software, like Autenti, that allow for easy storage, searchability, and version control of each signed sales contract.

High contract volume & manual processes

• Challenge: handling large volumes of contracts manually increases errors, delays, and operational inefficiencies.
  
  
• Solution: use templates for repeating contract types, consider using AI for drafting new contracts, and automate the parts of the process that you can.

How to make sales contracts 90% easier with e-signatures

We’ve talked a lot about sales contracts and their challenges. Let’s now go over one of the best methods to make sales contracts even 90% easier to handle.

The method we want to talk about is switching from traditional to electronic signing.

Why?

Because traditional sales contracts often involve printing, signing, scanning, and emailing documents back and forth, leading to delays and inefficiencies.

E-signatures streamline the process, making contract management faster, more secure, and more convenient.

They offer:

• Enhanced security: e-signatures use encryption, audit trails, and identity verification to ensure tamper-proof contracts—something traditional wet ink signatures could only dream of. 2FA and biometric verification add extra security, preventing fraud and unauthorized changes. Electronic signatures are also fully compliant with government-set-out standards, like eIDAS.
• Fast signing & instant execution: contracts can be signed in minutes from any device. Automated reminders speed up deal closures, reducing delays and shortening the sales cycle to increase revenue.
• Single document version: real-time collaboration ensures all parties work on the same document. Changes are tracked and logged for transparency, eliminating errors, miscommunication, and version control issues. For example, with Autenti you can add e-signatures to already signed documents!
• Online signing from anywhere: sign contracts remotely on desktops, tablets, or smartphones, removing location barriers for international sales and enabling global deal closures.
• Mass signing with one e-signature: send bulk contracts and get multiple signatures with one click—ideal for high-volume agreements and renewals.

Take Autenti for example. Besides offering all of the above-listed characteristics, the platform also comes with all e-signature types from the first-tier subscription plan.

With Autenti, you’ll get:

*SES signatures are the most versatile, allowing you to sign 90% of business documents, while also being the easiest to create.

Try Autenti for free for 14-days and see how your sales contract transforms for the better.