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What are terms of sale?
Terms of sale are the seller’s written conditions for a purchase: what is sold, how and when it is paid for, how it ships, what warranty applies and what happens if something goes wrong. When a lab or clinic buyer places an order, these terms (often called terms and conditions of sale) can end up as part of the contract, so they are worth reading before the purchase order goes out, not after the goods arrive.
This page is general information, not legal advice. It uses the Uniform Commercial Code (UCC) Article 2 text, which governs sales of goods, as the reference point; the UCC is a uniform text that each state adopts, so check the version your state has enacted for anything that matters to your order.
Terms and conditions of sale vs wholesale terms
“Terms and conditions of sale” (and “standard terms and conditions of sale”) usually mean the seller’s pre-written document that applies to every customer. “Wholesale terms” usually means the commercial conditions offered to resellers and trade buyers, such as payment arrangements or minimum quantities, which a seller may set out separately from its standard conditions. Both can sit alongside a negotiated agreement. If a buyer has a signed master agreement, see master service agreement vs individual purchase terms for how the two documents relate.
Whose terms apply when the purchase order and the seller’s terms differ?
This is the question most small buyers never ask. The buyer’s purchase order and the seller’s acknowledgement or invoice often carry different pre-printed terms. UCC section 2-207 addresses this directly:
- A definite and seasonable expression of acceptance, or a written confirmation sent within a reasonable time, operates as an acceptance even though it states additional or different terms, unless the acceptance is expressly made conditional on assent to those terms (2-207(1)).
- The additional terms are to be construed as proposals for addition to the contract. Between merchants, they become part of the contract unless the offer expressly limits acceptance to its own terms, they materially alter it, or notice of objection has already been given or is given within a reasonable time after notice of them is received (2-207(2)).
- Conduct by both parties that recognises the existence of a contract is enough to form one, even if the writings do not agree (2-207(3)).
In practice this means silence is not safe: if a seller’s terms include something you cannot accept, object in writing before the order proceeds rather than assuming your purchase order’s terms will win. The related purchase order for medical supplies guide covers what a purchase order itself should state.
Four clauses to check, and the rule that decides each
The table below maps four clauses commonly found in sellers’ terms to the UCC text that governs them. It is a reading aid for the buyer, not a template and not a statement of what any particular seller’s terms say.
| Clause to find | What the UCC text says | Question to ask the seller |
|---|---|---|
| Warranty disclaimer | To exclude the implied warranty of merchantability the language must mention merchantability and, in a writing, be conspicuous. A fitness exclusion must be in a writing and conspicuous. Expressions like “as is” or “with all faults” exclude implied warranties unless circumstances indicate otherwise (2-316). | Does the order carry any warranty at all, and is any disclaimer conspicuous? |
| Exclusive remedy and loss limits | An agreement may add or limit remedies; a remedy is optional unless expressly agreed to be exclusive. If an exclusive or limited remedy fails of its essential purpose, the general remedies are available. Consequential damages may be limited or excluded unless unconscionable (2-719). | Is replacement or refund the only remedy, and are consequential losses excluded? |
| Shipping term and risk of loss | If the contract requires shipment by carrier but not delivery at a particular destination, risk of loss passes when the goods are duly delivered to the carrier. If it requires delivery at a destination, risk passes when the goods are tendered there so the buyer can take delivery (2-509). | Does the shipping term put transit risk on you or on the seller? See freight collect vs prepaid and ex works meaning. |
| Claim notice | A buyer who has accepted goods must, within a reasonable time after discovering or when it should have discovered a breach, notify the seller or be barred from any remedy (2-607(3)(a)). | Does the seller set a specific number of days to report damage or defects, and in what form? |
Documents that go with terms of sale
Terms of sale rarely travel alone. Before ordering, a buyer can ask which of these apply and which version is current:
- The quote, and whether it states which version of the terms it is subject to.
- The purchase order, and the seller’s written acceptance or order confirmation.
- A business credit application, if payment on account is offered; it may bring its own agreement terms. The late payment fee guide explains one common invoice term.
- Quantity conditions such as minimum order quantity, or commitment structures such as a take-or-pay contract.
- Seller onboarding paperwork such as a vendor application form.
Mistakes small buyers make with terms of sale
- Treating the purchase order as the whole contract. Under 2-207 the seller’s confirmation and the parties’ conduct can still shape what applies.
- Staying silent on a term they cannot accept. Notice of objection has a time element in 2-207(2)(c).
- Skimming the shipping term. It can decide who carries the risk of loss while goods are in transit (2-509).
- Waiting to report a problem. The notice duty in 2-607(3)(a) runs from when the defect was or should have been discovered.
- Assuming a disclaimer is automatically valid. The UCC sets wording and conspicuousness requirements for it (2-316), and limited remedies can be tested against the “essential purpose” rule (2-719).
Frequently asked questions
What is terms of sale?
It is the set of conditions a seller attaches to a sale: price basis, payment, delivery, warranty, remedies and dispute terms. Terms of sale can become part of the contract through the order and acceptance process described in UCC 2-207.
How does terms of sale work in a medical supply purchase?
The buyer places a purchase order, the seller accepts or confirms it, and the seller’s terms may be referenced or attached. Where the documents disagree, UCC 2-207 decides how the additional or different terms are treated for a sale of goods, which is why reading and objecting in time matters.
Which documents or terms go with terms of sale?
Typically the quote, purchase order, order confirmation or invoice, any credit application, and quantity or shipping terms. The list above shows which existing CASRAI guides cover each.
What mistakes do small buyers make with terms of sale?
Assuming their own purchase order terms win, not objecting to terms in writing, overlooking the shipping term’s effect on risk of loss, and reporting problems late. See the section above.
What does “terms of sale meaning” refer to?
It refers to the same seller conditions described here. For a buyer of lab and medical supplies it means the seller’s whole conditions document, not just the payment line.
Sources
- Legal Information Institute, Cornell Law School, Uniform Commercial Code section 2-207, 2-316, 2-509, 2-607 and 2-719, checked 2026-11-03.
