What are sales terms?

Sales terms are the contractual terms under which a business sells products or services to its customers. Sales terms govern everything from pricing, payment, and delivery to returns, refunds, warranties, and limitations of liability — and they apply whether the sale takes place online, in-store, or through wholesale and distribution channels. Whether you sell physical goods, digital products, subscriptions, or services, sales terms are the legal foundation of every transaction your business completes.

Why you should consider sales terms

Defining the terms of the transaction. Sales terms establish the core commercial terms of every sale — including the price, payment methods, accepted currencies, taxes, shipping and delivery obligations, risk of loss in transit, and the point at which title to the goods passes from the seller to the buyer. Without written sales terms, these details are governed by default rules under the law, which may not reflect the parties’ intentions.

Limiting liability and managing returns. Sales terms allow a business to set its own return, exchange, and refund policies, disclaim implied warranties where permitted, limit liability for losses arising out of the use of the product, and cap the total liability the business may face in connection with a sale. These provisions are particularly important for businesses selling products online, where the buyer cannot inspect the goods before purchase.

Complying with consumer protection requirements. Alberta’s Consumer Protection Act imposes specific requirements on internet sales contracts and other distance contracts — including mandatory disclosures, cancellation rights, and restrictions on unfair terms. Sales terms for businesses that sell to consumers may want to be drafted with these requirements in mind to avoid regulatory exposure and unenforceable provisions.

Managing wholesale, distribution, and B2B relationships. Sales terms are not limited to consumer transactions. Businesses that sell through wholesale, distribution, or resale channels can use sales terms to define minimum order quantities, pricing tiers, payment terms, return allowances, territory restrictions, and the obligations of the reseller. Sales terms in a business-to-business context can allocate risk differently than consumer-facing terms.

Supporting e-commerce and digital sales. For businesses that sell online, sales terms are the contract the customer agrees to at checkout — whether through a click-wrap agreement, a reference in the shopping cart, or a link in the order confirmation. Sales terms for online transactions may want to address delivery timelines, digital delivery, subscription auto-renewal, and the customer’s right to cancel under the Consumer Protection Act.

Relevant laws and regulations

Sale of Goods Act, RSA 2000, c S-2. Alberta’s foundational legislation governing the sale of goods. The Sale of Goods Act establishes default rules for the transfer of title, delivery, risk of loss, implied conditions and warranties (including implied warranties of quality and fitness for purpose), and remedies for breach of contract.

Consumer Protection Act, RSA 2000, c C-26.3. Alberta’s primary consumer protection legislation. The Consumer Protection Act regulates unfair practices in consumer transactions, imposes specific requirements on internet sales contracts and other distance contracts, and provides consumers with cancellation rights and other remedies.

Electronic Transactions Act, SA 2001, c E-5.5. Alberta’s legislation governing electronic contracts and signatures. The Electronic Transactions Act confirms that contracts formed electronically — including sales terms accepted by clicking “I agree” at checkout — are not denied legal effect solely because they are in electronic form.

Competition Act, RSC 1985, c C-34. Canada’s federal legislation governing competition and trade practices. The Competition Act prohibits false or misleading representations about a product’s price, quality, or availability, which can apply to claims made in sales terms, product listings, and promotional materials.

Common legal issues

Failing to comply with internet sales contract requirements. Alberta’s Consumer Protection Act imposes specific requirements on internet sales contracts, including mandatory disclosures about the seller, the goods, the total price, delivery date, and cancellation rights. Sales terms for online transactions that do not include these disclosures may give the consumer the right to cancel the transaction.

Excluding implied warranties in consumer transactions. The Sale of Goods Act implies certain conditions and warranties into every contract for the sale of goods — including that the goods will be of merchantable quality and reasonably fit for their intended purpose. While sales terms can modify or exclude some of these implied terms in commercial transactions, doing so in consumer transactions may be restricted by the Consumer Protection Act and may not be enforceable.

Unclear delivery, risk of loss, and title terms. Disputes frequently arise over when risk of loss passes from the seller to the buyer — particularly for goods shipped to the buyer. Without clear sales terms addressing delivery obligations, risk during transit, and the point at which title transfers, the default rules under the Sale of Goods Act apply, which may not reflect the parties’ commercial expectations.

Inconsistent sales terms across channels. Businesses that sell through multiple channels — online, in-store, through resellers, or through marketplaces — may have different sales terms for each channel without realizing it. Inconsistent sales terms can create confusion about which terms govern a particular transaction and can expose the business to claims under the most favourable set of terms.

Auto-renewal and subscription billing issues. Sales terms for subscription-based products or services may want to clearly address auto-renewal, billing frequency, cancellation procedures, and refund policies. Failing to disclose auto-renewal terms or making cancellation unreasonably difficult can result in consumer complaints and regulatory scrutiny.

Frequently asked questions

Do I need separate sales terms for online and in-store sales? Not necessarily, but many businesses find it practical to maintain separate sales terms for each channel because the legal requirements differ. Internet sales contracts are subject to specific disclosure and cancellation requirements under the Consumer Protection Act that do not apply to in-person transactions.

What happens if my sales terms conflict with the Consumer Protection Act? The Consumer Protection Act generally prevails in consumer transactions. Sales terms that purport to waive statutory rights, exclude mandatory disclosures, or impose unfair conditions on consumers may be unenforceable.

Do click-wrap sales terms at checkout create a binding contract? Generally, yes. Click-wrap agreements — where the customer affirmatively indicates agreement before completing a purchase — are generally enforceable under the Electronic Transactions Act and at common law. The sales terms can be presented as a condition of completing the transaction.