Dear Rahul,

If the software to be sold is already built then a simple feature sheet, and perhaps the user manual, would be enough.

However, if the goal of the contract is to capture the agreement to develop a new piece of software then for this purpose you can probably use a Software Requirements Specification (SRS) document to outline and describe the desired features and behavior needed to be supported by the new system.

Here are some resources which may help you out:

Writing Software Requirements Specifications

Software Requirements Specification Template

Hope this helps!

- Adrian