How to draft a sale agreement for products on e-commerce websites

March 22, 2021

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This article is written by Adv. Nihitha who is pursuing a Diploma in Advanced Contract Drafting, Negotiation and Dispute Resolution from LawSikho.


During the time of COVID-19 the year of the pandemic which has changed our mindset, people are locked up in homes having no access to the outside world. No shop, local kirana store, necessity being available locally. But anyhow the needs of people didn’t stop over there. They had to get their basic requirements of food, clothing, and medicines delivered regularly and on a daily basis. The only option was to order online from websites for fulfilling their requirements. Thus online websites that provide the facilities of delivering necessary were allowed under “Essential services” and allowed to deliver at home. So as a consumer you must be aware of the rights and liabilities for entering into transactions with online websites. In this article, you will understand the rights of the consumer and the rights of the vendor for purchasing and selling on e-commerce websites.

Important Clauses in a Sale Agreement

Be careful while you are agreeing to terms and conditions on the online website but as a purchaser, you need to read or have a glance through the document. Check for important clauses like returns policy, refund policy, or replacement. Here are the important clauses to look for in the vendor terms and conditions.

1. Scope: Always read the name of the website and its functions and role as an online e-commerce marketplace. For eg: whether the website has the correct description of goods, advertising, and sale of grocery, durables, medicines with the specifications and date of manufacturing and expiry date.

2. Important terms to read in an e-commerce agreement:

a. Products: Whether the products offered for sale by the vendor are manufactured by the vendor or whether it is sourced/purchased from third party suppliers or marketed by the vendor. Always look for the source from where the product has been manufactured.

b. Services to be provided by the company: The facilitation of the sale of products through the portal regarding the information, assistance in listing the products on the websites. The vendor agreeing to the image of the product will be exact and accurate. The company will provide exact information concerning the status of the order placed by the company.

c. Discounts policy: Read the policy of discounts or offers to the customer being offered.

3. Advertising: The products are advertised ethically and legally. No use of unwanted, inappropriate ways of advertisement is made out.

– Sample clauses: “The company shall advertise / display, on behalf of the vendor, the Products on the Portal based on the preference opted for by the vendor in the vendor Agreement”. 

4. Quality and Quantity Assurances: The vendor and the company assures the customers to provide the right quality of a product. Also, the measurement of a quantity is carried out rightly. 

5. Ordering, Packing, and Delivery: The vendor and the company will provide the correct means of packing and delivery to the customer’s doorstep. The vendor should state the ways and method of ordering, packing, and delivering to the customer. The company should provide details of its warehouse and the mode of transportation of goods to the customer.

– Sample clauses for ordering, packing, and delivery:

The portal will enable customers to place orders for the product(s) they wish to purchase on the website. 

– Upon receiving the confirmation of the order by the customer, the company will update the details of the confirmation of the order on the internal portal which the company shall maintain for the vendor. 

6. Invoicing and Payments: Mostly the website was referring to credit card payment during the time of the COVID pandemic. Cash was not allowed. vendors, customers, dealers must always look for methods for payments and whether the channel or gateways for the payment are secure and safe. An authorized channel for payment must always be mentioned in the agreement. The soft copy of the invoice must be given by way of e-mails or SMS. 

– Sample Clause:The vendor will generate, print and issue an invoice for the purchased Product to the Customers from the vendor portal provided by the company. At times, the Invoice may contain some additional shipping, COD or any other charges charged to the customer based on the company’s policy from time to time. The vendor agrees to book the same in their books against which the company will raise the debit note to the vendor for equivalent amounts resulting in no gain/ loss to the vendor.”

7. Return and Refund: Since the customers or vendors are dealing in websites without feeling the real experience of goods and having an eye to eye contact the return policy must be very flexible and easy. The website has to return the goods on the dissatisfaction of the customer immediately and the vendor cooperating with the returns. The terms of the agreement should clearly state the time limit for the return of the goods. The conditions of replacement goods should be stated. 

– Sample Clause of Return policy: “The company has a Return and Refund Policy (“R&R Policy”) which is applicable to the sale of products through the portal.”

“The vendor has been provided a copy of the R&R Policy or has been given access to the R&R Policy and the vendor hereby confirms that the terms of the R&R Policy are acceptable to the vendor.” 

8. Obligations of the vendor: The website should state the obligations of the vendor as being responsible for all warranty and after-sales services. The vendor provides the standard product warranty and maintenance. Check the indemnification clause in this regard.

– Sample clause: The vendor shall (either itself or through its suppliers) be responsible for all warranty and after-sales services relating to the products as per its standard product warranty and maintenance contracts and shall keep the company fully indemnified in this regard.

9. Obligations of the company: The company shall take steps about customer awareness on the portal. No unethical materials or religious sentiment are displayed on the portal. The company shall ensure that the site is free from malware attacks, viruses, or threats that can harm the customers or vendor devices. The company shall provide the authenticity of the site address.

– Sample Clause: “company shall take reasonable steps to specify for customer awareness on the portal, the warranty period and terms of such warranty as communicated to it by the vendor in relation to the Products displayed on the Portal.”

– “The company shall maintain the proper and valid registration of its domain name in relation to the website during the term at its own costs.”

10. Confidentiality: vendor, customers need to check the confidentiality clause to whether the website has agreed to maintain confidential information in the site and will not disclose any information to the third party.

11. Terminations: vendor and website have to check for terminations clause upon material breach, breach due to defective products. The vendor and website must have a clause for the period of termination and mode of termination. The termination can also mention the unwillingness of parties to continue and the remedies available for it.

12. Representations and warranties of the vendor: The vendor must specify his rights, approvals, consents from any third party if any. The vendor has the necessary permissions as required under the law. The vendor is having a valid, clear marketable title to all the products. 

13. Representations and warranties of the website: The website must specify his rights, approvals, consents from any third party if any. The vendor has the necessary permissions as required under the law. The vendor is having a valid, clear marketable title to all the products. 

14. Indemnity: Both the parties shall indemnify each other and hold harmless for and the other party. The indemnified party shall give notice to the other side of the existence and specifics of any such claims.

15. Intellectual Property of the website: The website shall own all rights in any intellectual property created by the company under these terms & conditions, including material, designs, graphics created and/or developed by the company. The provision of the company owns and shall exclusively own all rights (including all intellectual property rights), title, and interest in respect of the portal/website.

16. Taxes: The website should state the amount of taxes to be paid and the taxes are being paid to the government regularly. 

17. Electronic Executions: These terms & conditions are being executed electronically and each Party recognizes that the same is validly executed under the Information Technology Act, 2000 and shall form a binding agreement between the parties and no party shall claim invalidity of these terms & conditions merely because these terms & conditions are being executed electronically.

– Sample Clauses for Electronic Executions: “These terms & conditions are being executed electronically and each Party recognizes that the same is validly executed under the Information Technology Act, 2000 and shall form a binding agreement between the parties and no party shall claim invalidity of these terms and conditions merely on the grounds that these terms and conditions are being executed electronically. For the aforementioned purposes, the parties hereby agree that these terms and conditions are being concluded and executed at (name of place).

18. General Clauses: The website providing the services and carrying out related functions following the provisions of terms & conditions, the company is hereby authorized as the agent of the vendor to act under the terms herein and other instructions of the vendor. It should be mentioned that these terms & conditions together with the vendor agreement is the complete and binding agreement of the parties concerning the subject matter hereof. vendors hereby agree to be bound by such amended terms & conditions, as may be notified by the company. If any provision of these terms & conditions is held to be invalid or unenforceable in any respect, such provision shall be modified to the extent necessary to render it, as modified, valid and enforceable under applicable laws, and such invalidity or unenforceability shall not affect the other provisions contained herein.

19. Governing Provisions: The document complies with the electronic terms in terms of the Information & Technology Act, 2000 about electronic records in various statutes. The merchant is using the Platform of data, information, or communication to service provider, merchant agrees and understands that merchant is communicating with service provider through electronic records and merchant consents to receive communications via electronic records from service provider periodically and as and when required this clause must be stated. The service provider will communicate with merchant by email at the designated electronic mail address provided by the merchant at the time of registration must be stated.

20. Governing Law and Jurisdiction: The customer must be aware of the governing laws and must be stated with the laws of India. All disputes arising out of or about these terms and conditions shall be subject to the exclusive jurisdiction of local courts or at metro cities or in India.


In present times it is necessary for adults and senior citizens to be aware of the e-commerce websites of the terms and conditions. It is therefore mandatory to know about the agreement in e-commerce sites. The businessmen, a local vendor should also be aware of the contract entered into e-commerce websites. Hence, being aware and reading some of the articles which I have written may help you.


  1. https://ecommerceguide.com/guides/ecommerce-terms-conditions/
  2. pepperfry_merchant_services_agreement
  3. Academy E-Commerce Agreement 090209-1
  4. vendor_Terms_Conditions

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