Is an e-signature legally valid?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and under UETA where adopted. Ensure intent to sign, consent to conduct transactions electronically, attribution to the signer, and reliable record retention to meet the ESIGN four-part validity test.

When is notarization required?

Notarization is uncommon for standard sales processing agreements but may be required for agreements that create or modify real-estate-related rights, certain powers of attorney, or where a party requests notarized acknowledgement. Check applicable state law before assuming notarization is necessary.

Can I use remote online notarization (RON)?

Many states permit RON with identity proofing, audio-video recording, and retention rules, but availability and requirements vary by state. Confirm state notary commission rules and recordkeeping obligations before relying on RON for notarized acknowledgements.

What if a signer lacks authority?

If the person signing lacks authority, the contract may be voidable and enforcement or payment may be delayed. Require evidence of authority (board resolution or power of attorney) and include representation and warranty clauses to reduce this risk.

How long must I keep signed agreements?

Retention depends on applicable rules: IRS guidance requires relevant financial records a minimum of three years (IRC §6501(a)), HIPAA-covered records six years (45 CFR §164.530(j)), and other industry rules may require longer retention.

How do I fix errors after signing?

Use a signed amendment or corrective agreement executed by all parties. For clerical mistakes, attach a signed erratum that documents the correction and preserve the original audit trail to maintain evidentiary integrity.

Electronic Signature
Templates
Sales
Sales Processing Agreement

Sales Processing Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

SALES PROCESSING AGREEMENT

This Sales Processing Agreement (the Agreement) is entered into effective as of (Effective Date), by and between:

Seller Name: Seller Address: Buyer Name: Buyer Address:

RECITALS

WHEREAS, Seller engages in the sale of goods and/or services identified in this Agreement, and Buyer desires Seller to process sales transactions, shipments, and associated order management on the terms set forth herein; and

WHEREAS, the parties desire to set forth their respective rights and obligations with respect to the processing of sales, payments, deliveries, warranties, returns and related services.

DEFINITIONS

Capitalized terms used in this Agreement have the meanings set forth below or as otherwise defined in the text: "Goods" means the items described in the Product Schedule; "Services" means order processing, invoicing, payment reconciliation and shipment coordination described herein; "Net Amount" means amounts payable after deductions for discounts, taxes, shipping and refunds.

SCOPE OF SALES PROCESSING SERVICES

Seller shall perform the Services listed below in connection with sales of the Goods to end customers on behalf of Buyer. Services shall include: receiving and processing customer orders, generating sales documentation, collecting customer payments, coordinating shipment, and providing regular reconciliation reports to Buyer.

Service Description (summarize primary processing services):

PRODUCT / SERVICE SCHEDULE

The table below identifies Goods and/or Services to be processed under this Agreement. Parties may attach additional schedules by written agreement.

Item	Description	Quantity	Unit Price	Total

Subtotal:

Taxes (specify jurisdiction):

Shipping & Handling:

Total Amount Due:

PAYMENT TERMS

Payment of Net Amount is due within days from invoice date unless otherwise agreed in writing. Accepted payment methods:

Credit Card ACH Wire Transfer Check

Late payments shall bear interest at the rate of or the maximum permitted by law, whichever is less. Buyer shall be responsible for reasonable collection costs and attorneys' fees incurred by Seller to collect overdue amounts.

DELIVERY, TITLE AND RISK OF LOSS

Delivery Date (Estimated):

Shipping Method:

Unless otherwise agreed in writing, title and risk of loss pass to Buyer upon delivery to the carrier at Seller's shipping facility (FOB Seller). Seller's only obligation with respect to shipment is to tender the Goods to the carrier in good order and to provide appropriate shipping documentation.

WARRANTY

Seller warrants that, for a period of from the date of delivery, the Goods shall materially conform to Seller's published specifications at the time of sale. This warranty does not cover defects resulting from misuse, alteration, improper storage, or normal wear and tear.

RETURNS AND REFUNDS

Buyer may return nonconforming Goods within days after delivery, provided Buyer obtains a return authorization from Seller. Refunds will be issued following inspection and confirmation of nonconformity. Restocking fees, shipping costs, and conditions for return will be as set forth in Seller's return policy stated below.

Return Policy Details:

LIMITATION OF LIABILITY

Except for liability arising from willful misconduct or gross negligence, each party's aggregate liability to the other for any and all claims arising out of or relating to this Agreement shall not exceed the total amounts paid or payable under this Agreement in the twelve (12) months preceding the claim. UNDER NO CIRCUMSTANCES SHALL EITHER PARTY BE LIABLE FOR ANY CONSEQUENTIAL, INCIDENTAL, SPECIAL, OR PUNITIVE DAMAGES.

INDEMNIFICATION

Each party (Indemnifying Party) shall indemnify, defend and hold harmless the other party (Indemnified Party) from and against any third-party claims, liabilities, losses, damages and expenses (including reasonable attorneys' fees) to the extent arising from the Indemnifying Party's breach of this Agreement, negligent acts, or willful misconduct.

CONFIDENTIALITY

Each party shall maintain in confidence all non-public information disclosed by the other party in connection with this Agreement, and shall not use such information except for performance of this Agreement. Confidential obligations continue for a period of three (3) years following termination.

TERM AND TERMINATION

This Agreement shall commence on the Effective Date and continue for an initial term of months, automatically renewing for successive one-year periods unless either party provides written notice of non-renewal at least 30 days prior to the then-current term expiration. Either party may terminate this Agreement for material breach if the breach remains uncured thirty (30) days after written notice.

NOTICES

Notices required by this Agreement shall be sent to the addresses below and shall be deemed given upon receipt.

Seller Notice Address: Buyer Notice Address:

GOVERNING LAW; DISPUTE RESOLUTION

This Agreement shall be governed by and construed in accordance with the laws of the State of , without regard to conflict of law principles. The parties shall attempt in good faith to resolve disputes through negotiation; unresolved disputes shall be submitted to binding arbitration in the county of the Seller's principal place of business, in accordance with the rules mutually agreed by the parties.

MISCELLANEOUS

Assignment of this Agreement by either party is permitted only with the prior written consent of the other party, which consent shall not be unreasonably withheld. No modification of this Agreement shall be effective unless in writing and signed by authorized representatives of both parties. If any provision of this Agreement is found unenforceable, the remaining provisions shall continue in full force and effect.

Additional Terms or Special Instructions:

SIGNATURES

Seller:

Printed Name:

By:

Date:

Buyer:

Printed Name:

By:

Date:

What a Sales Processing Agreement Covers

A Sales Processing Agreement is a contract that defines responsibilities and procedures for processing sales transactions between a merchant and a payment processor or third-party service provider. It specifies payment flows, settlement timing, fee schedules, chargeback handling, data security obligations, reporting requirements, and dispute resolution mechanisms. The agreement also addresses compliance with relevant standards such as PCI DSS and any industry-specific rules (for example, HIPAA when health data is involved). Clear terms reduce operational friction and allocate financial and legal risk for transaction errors or reversals.

Why a Formal Agreement Reduces Risk

A Sales Processing Agreement documents operational responsibilities, payment terms, and dispute procedures to reduce processing errors and financial exposure. It clarifies chargeback allocation, preserves audit trails, and supports regulatory compliance with PCI standards and e-signature frameworks such as ESIGN and UETA.

Who Typically Completes a Sales Processing Agreement

Common users include merchants, payment processors, sales operations teams, legal counsel, and third-party vendors who manage transaction processing and reconciliation.

Merchants and retailers: document payment routing, fees, and settlement schedules to avoid surprises and reconcile accounts.
Payment processors and gateways: allocate chargeback liability, define reconciliation duties, and set service-level expectations.
Finance and legal teams: negotiate indemnities, data controls, compliance obligations, and reporting requirements.

Treat the agreement as a shared operational reference for audits, disputes, and vendor performance management across sales channels.

Essential Sections to Include in the Agreement

A professional Sales Processing Agreement should clearly define operational, financial, and legal terms to align parties and minimize disputes during transaction processing.

Parties

Identify each contracting entity by full legal name, entity type, and authorized representatives; include addresses and notice contacts for service and enforcement.

Scope

Specify the types of transactions covered, geographic limits, payment methods, and whether recurring billing, refunds, or subscription services are included.

Fees & Pricing

State processing fees, chargeback fees, billing cycles, reserve or holdback terms, and responsibility for taxes or network fees.

Payment Flow

Outline fund routing, settlement timing, reconciliation processes, failed transaction handling, and responsibilities for returns or reversals.

Security & Compliance

Specify PCI DSS controls, encryption, access limits, breach notification timelines, and HIPAA protections when protected health information is involved.

Termination & Remedies

Define termination triggers, cure periods, final settlement mechanics, liability caps, indemnities, and post-termination data-handling obligations.

Required Security and Compliance Elements

Encryption: TLS 1.2/1.3 in transit; AES-256 at rest.

Audit Trail: Action logs with timestamps and IP addresses.

PCI DSS: Specify merchant and processor responsibilities.

HIPAA: BAA required when PHI is processed.

Authentication: Define signer verification methods (email/SMS/KBA).

Data Retention: Set a retention policy aligned with law.

Step-by-Step: From Draft to Execution

Use this sequential checklist to prepare, review, execute, and archive a Sales Processing Agreement without missing critical steps.

01

Prepare Draft: Gather party data, fee schedules, and scope details.
02

Review Legal: Have counsel check indemnities, liability, and compliance clauses.
03

Add Fields: Place signature, date, and conditional fields for variable terms.
04

Execute & Store: Obtain signatures, deliver executed copies, and archive securely.

Configuring an Online Signing Workflow

Match workflow settings to required approvals, authentication strength, and your storage and audit policies before sending agreements for signature.

Field	Configuration
Authentication Method	Email link, SMS code, or KBA; choose strength.
Field Types	Signature, initials, date, checkbox, conditional fields.
Conditional Logic	Show clauses based on product or jurisdiction choices.
Notifications & Reminders	Set signer reminders and internal approval alerts.

Where to Send and How Submissions Flow

A clear routing model ensures each signer receives the correct document version and that completion events trigger accounting and operations updates.

Upload Document: Sender uploads the finalized agreement and places fields.
Assign Signers: Enter signer emails and define signing order.
Signer Authentication: Signer verifies identity using selected authentication.
Completion & Delivery: Signed document and audit trail are distributed to parties.

Technical and Integration Considerations

Confirm the platform supports required integrations, accepted file formats such as PDF and DOCX, and enterprise-grade security before e-submission.

Integrations: Salesforce, NetSuite, Google Workspace supported.
Formats: PDF, DOCX, and HTML accepted.
Security: AES-256 at rest; TLS 1.2/1.3 in transit.

Typical Timelines and Deadlines to Track

Track signature windows, payment deadlines, dispute submission periods, and notice or cure periods to avoid contract breaches and financial penalties.

Signature Deadline:

Specify days allowed for signing after issue, commonly 7–30 days.

Payment Due Date:

State invoice due date and grace period, e.g., Net 30 terms.

Chargeback Window:

Allow time for card network dispute handling per issuer rules.

Notice Periods:

Define cure and termination notice durations, often 30 days.

Record Retention Reminder:

Schedule records for retention according to applicable law.

Common Preparation Mistakes to Avoid

Unclear fee language causes disputes and unexpected chargebacks; specify percentages, caps, and timing to reduce financial risk.
Incomplete signer authority or mismatched legal names can invalidate enforcement and delay bank or processor setup; verify signatory authority.
Missing data-security clauses or PCI obligations increases liability exposure; include specific controls, audit rights, and breach procedures.
Failure to define chargeback responsibilities leads to costly reversals; allocate chargeback and refund procedures explicitly in writing.

Primary Penalties and Operational Risks

Chargeback Losses: Processor or merchant may bear disputed amounts.

Backup Withholding: 24% withholding risk for missing or incorrect TIN.

Regulatory Fines: PCI or HIPAA fines for noncompliance.

Contractual Damages: Potential breach damages and indemnity exposure.

Reputational Risk: Customer trust and sales can be affected.

Litigation Costs: Attorney fees and court costs may follow disputes.

eSignature Vendor Pricing and Feature Comparison

Comparison of common eSignature vendors for Sales Processing Agreements; signNow is listed first to align with the vendor ordering convention on this page.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day trial	Varies by offer	Varies by offer	Varies	Varies
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions About Sales Processing Agreements

Answers to common questions about signing, enforcement, and electronic submission of Sales Processing Agreements in the United States.

Need help? Contact support

Is an e-signature legally valid?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. §7001) and under UETA where adopted. Ensure intent to sign, consent to conduct transactions electronically, attribution to the signer, and reliable record retention to meet the ESIGN four-part validity test.
When is notarization required?
Notarization is uncommon for standard sales processing agreements but may be required for agreements that create or modify real-estate-related rights, certain powers of attorney, or where a party requests notarized acknowledgement. Check applicable state law before assuming notarization is necessary.
Can I use remote online notarization (RON)?
Many states permit RON with identity proofing, audio-video recording, and retention rules, but availability and requirements vary by state. Confirm state notary commission rules and recordkeeping obligations before relying on RON for notarized acknowledgements.
What if a signer lacks authority?
If the person signing lacks authority, the contract may be voidable and enforcement or payment may be delayed. Require evidence of authority (board resolution or power of attorney) and include representation and warranty clauses to reduce this risk.
How long must I keep signed agreements?
Retention depends on applicable rules: IRS guidance requires relevant financial records a minimum of three years (IRC §6501(a)), HIPAA-covered records six years (45 CFR §164.530(j)), and other industry rules may require longer retention.
How do I fix errors after signing?
Use a signed amendment or corrective agreement executed by all parties. For clerical mistakes, attach a signed erratum that documents the correction and preserve the original audit trail to maintain evidentiary integrity.

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