Building Materials Sales Agreement

What a good one includes

• Exact material specifications, including grade, brand, quantities, and dimensions, to prevent any confusion about what is being purchased.
• Clear pricing structures and payment terms, detailing deposit amounts, progress payments, and late payment penalties.
• Detailed delivery and risk-of-loss clauses that specify exactly when ownership and liability transfer from the seller to the buyer.
• A robust inspection and acceptance window, giving the buyer a set number of days to report defects before the materials are deemed accepted.
• Force majeure and supply chain delay provisions that protect the supplier from liability due to weather, labor shortages, or material scarcity.
• A dispute resolution clause outlining how disagreements over quality or payment will be handled, such as through mediation or binding arbitration.

Common mistakes to avoid

• Failing to specify who is responsible for unloading the materials at the job site, which often leads to costly delays and damaged goods.
• Using generic payment terms that do not account for price volatility in raw materials like steel or lumber.
• Omitting a clear protocol for handling change orders or adjustments to the material quantities mid-project.
• Neglecting to define the exact consequences of a buyer's failure to accept a delivery on the scheduled date.

Frequently asked questions