A purchase agreement is a document that outlines the terms and conditions of a transaction of goods, which can range from business assets, vehicles to property. Other common names for a purchase agreement are purchase contract, sales and purchase agreement(SPA), and purchase agreement form.

It’s quite tricky for most people to distinguish between a bill of sales and a purchase agreement. In the purchase agreement, certain conditions must be met before the finalization of the deal.

SPA is preferred in transactions that involve a substantial amount of money due to the fact it provides the seller and buyer with protection.

Drafting the purchase agreement can turn out to be a tricky task, especially if you are not synonymous with the buying and selling process. A purchase agreement attorney can offer much-needed assistance when it comes to drafting and reviewing your purchase contract.

When is a Purchase Contract Required?

Some of the situations that require the use of a purchase agreement form include;

• You want a written agreement when selling your property
• You want a written proof of agreement when buying property
• You need assurance that the seller can legally sell the property
• You want documentation of the payment agreements when selling goods

Whereas a SPA can serve general purposes, an experienced and knowledgeable purchase agreement attorney can customize a contract for specific uses, including franchise purchase, property purchase, real estate purchase, asset purchase, business sale, stock purchase, etc.

Elements of a Purchase Agreement

Parties Description

A purchase contract should clearly define the buyer and seller by including information such as full names, phone numbers, and physical addresses. The document should also list the co-signers involved in the transaction.

Property Description

The purchase contract also includes a detailed description of the property being exchanged, carefully outlining any defects known at the time of drafting the agreement. You ought to be specific and descriptive as much as possible while leaving no room for error.

The goods or property information provided should match the details in government and business records.

Payment details

Payment information includes the total price of the property as well as the preferred form of payment. The purchase contract will also state whether the buyer is paying a lump sum amount or in installments.

If the buyer does not intend to pay right away, there is a need to draft a promissory note outlining the repayment terms, interests, and schedule.

Warranties

The seller must guarantee the condition and quality of the property with factual statements included in the purchase agreement. The buyer may claim for a breach of warranty when the warranty proves to be false.

Conditions precedent

Signing the purchase contract and finalizing the sale on the same day is the most preferred way of completing a deal.

Nonetheless, sometimes it becomes necessary to assign a particular duration between signing the SPA and deal completion to allow the fulfillment of certain conditions.

These conditions are referred to as the conditions precedent. The SPA must clearly outline them.