Selling metal buildings requires a robust sales team. But before you bring on new salespeople, a watertight purchase contract is crucial. This contract protects both your business and your sales team, ensuring clear expectations and preventing future disputes. This guide outlines the key components of a comprehensive purchase contract tailored to a metal building sales team.
What Should a Metal Building Sales Contract Include?
A comprehensive purchase contract should cover several key areas to protect both the business and the sales team. Let's break down the essential components:
1. Definition of the Sales Team's Role and Responsibilities:
This section clearly outlines what the sales team is responsible for. Be specific! Include details such as:
- Lead Generation: How will leads be generated? Will the company provide leads, or will the sales team be responsible for their own prospecting?
- Sales Process: Detail the steps involved in closing a sale, including presentations, proposals, negotiations, and contract signing.
- Territory: Define the geographical area each salesperson will cover.
- Target Metrics: Specify sales goals (e.g., revenue targets, number of closed deals) and performance expectations.
- Reporting Requirements: Detail how often and in what format the sales team needs to report their progress.
2. Commission Structure and Payment Terms:
Transparency is key. Clearly define the commission structure, including:
- Commission Rate: State the percentage of the sale price the sales team will receive as a commission. This could be a tiered system, offering higher percentages for exceeding targets.
- Payment Schedule: Specify when and how commissions will be paid (e.g., monthly, quarterly, upon project completion).
- Commission Delays: Outline circumstances where commission payments might be delayed (e.g., project cancellations, payment disputes with clients).
- Bonuses and Incentives: Include details on any additional bonuses or incentives for exceeding targets or achieving specific milestones.
3. Intellectual Property and Confidentiality:
This section is crucial for protecting your business's confidential information. It should include:
- Non-Disclosure Agreements (NDAs): Ensure that sales team members agree not to disclose confidential business information, including pricing, client lists, and sales strategies.
- Ownership of Materials: Clearly state that all sales materials (e.g., brochures, presentations, proposals) remain the property of the company.
- Use of Company Resources: Outline acceptable usage of company resources such as computers, phones, and email accounts.
4. Term and Termination:
Clearly define the duration of the contract and the conditions under which it can be terminated. Consider including clauses for:
- At-Will Termination: Allows either party to terminate the contract with or without cause, providing appropriate notice.
- Cause for Termination: Define specific actions that would constitute grounds for immediate termination (e.g., breach of contract, violation of confidentiality).
- Non-Compete Clause: Include a non-compete clause preventing the sales team from working for competitors within a specific timeframe and geographical area after the contract's termination.
5. Dispute Resolution:
Outline a process for resolving any disputes that might arise. This might include:
- Mediation: Attempting to resolve disputes through a neutral third party.
- Arbitration: Using a neutral third party to make a binding decision.
- Litigation: Resolving disputes through the court system.
Frequently Asked Questions (FAQ)
How long should a metal building sales contract be?
The length of the contract depends on your business needs and the nature of the relationship with your sales team. However, it's generally recommended to have a clearly defined term, with options for renewal.
What are the legal implications of not having a contract?
Operating without a contract leaves your business vulnerable to legal disputes, misunderstandings regarding compensation, and potential breaches of confidentiality. A contract provides a legally binding framework for your agreement.
Can I use a standard sales contract template?
While templates can be a starting point, it’s crucial to adapt them to your specific needs and consult with legal counsel to ensure the contract accurately reflects your business requirements and complies with applicable laws.
By creating a comprehensive and well-defined purchase contract, your metal building business can protect its interests and establish a strong, productive relationship with its sales team. Remember to consult with a legal professional to ensure your contract is legally sound and tailored to your specific circumstances.
