Purchase and Sale Agreement
Acquiring assets is one of the best feelings in both business and in personal life. For extraordinarily expensive or complicated purchases, complications might arise. For this purpose, we have a purchase and sale agreement. It is a legal document executed by both parties of a sale, namely, the buyer and the seller. It generally contains specific terms of the sale. However, if there are certain agreements between the two parties that cannot be settled within the terms of the sale, a purchase and sale agreement can state these conditions. In essence, the purchase and sale agreement is a document a condensed version of what the buyer and seller has agreed upon in the negotiation phase of a sale.
What is it
In general, a purchase and sale agreement is a document that provides the framework of a sale. It serves as guideline as to how the purchase is going to proceed, its inclusions and exclusions, and most importantly, the final price agreed upon by both parties. It’s basically a summary of what both parties agree upon during the negotiation stage.
In some situations, this document might be known by other names such as sale and purchase agreement, contract for sale, or agreement to sell. No matter what these documents are called, they all just function as a way to finalize the terms and conditions.
To be able to perform its job, a purchase agreement has to contain at least the following:
- Buyer and seller
- What is being sold, its specifications, and description
- Date of the delivery
- Amount of agreed upon purchase price
However, it can contain other more specific information such as contingencies and conditions that both buyer and seller agrees on. As such, there are various uses for a purchase agreement.
Real estate transactions
It serves different purposes in different situations. In real estate sales, for example, it functions as a finalisation of the final price of the property that both parties agree on during the negotiation. It also details any deposits made, transactions fulfilled, other contingencies, and the closing date. A purchase agreement specifies every single detail of the transaction so that both parties are kept up-to-date.
Supply-chain purchase transactions
It’s an extremely important document for supply chain purchases where a million things can go wrong. In this situation, the contingencies and conditions sections of the purchase agreement is the most important part. It specifies exactly what steps should be taken when unexpected events occur such as late or incomplete deliveries. This is extremely important if the goods purchased are perishable or the transaction is time-sensitive.
It’s also important to execute a purchase agreement for revolving purchases. A purchase agreement can lockdown the price of an item that a buyer intends to buy on a monthly basis. It’s an important feature that can help suppliers and purchasers forecast costs and demands. Having that ability essentially helps both parties to have some semblance of stability even if the market becomes chaotic.
Should I get one for my next purchase?
It’s not a boon to making the sale and it’s not absolutely necessary to execute one. However, the amount of delay that can be avoided due to miscommunication can be eliminated by a purchase agreement. So, if you’re contemplating to purchase a particularly complicated product, consider executing a purchase and sale agreement. If it’s a simple product, however, you can do without it.
Okay, where can I get a purchase and sale agreement?
You can get a purchase and sale agreement here ! LawyerSearch offers purchase and sale agreements and other contracts drafted by lawyers quickly and easily.
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