In a service contract, you will need to determine a payment plan. Here are the decisions you need to make:
Payment type is how the buyer intends to pay the seller. Payment can come in the form of:
- Cash
- Certified check
- Promissory note
- Bank draft
- PayPal
- Email transfer, etc.
The seller should provide a receipt to the buyer for transactions involving cash.
Deposit is a specified amount of money that a buyer gives to a seller as security that they will follow through on the transaction. If the buyer chooses to purchase, the deposit will go towards the purchase price. The deposit can be refundable or nonrefundable, meaning that either the deposit is returned to the buyer or kept by the seller if the deal does not go through.
It is important to include payment due dates for both the payment itself as well as the deposit in the Sales Agreement, if applicable, to make the transaction details clear.