A purchase agreement is a type of legal document outlining the different conditions and terms that are related to the sale of goods. It creates a legally binding contract between the buyer and the seller. Also, they are generally related to the sale and purchase of goods, rather than services (agreements for services are sometimes called “service agreements”).
What are Purchase Agreements Used For?
Purchase agreements can cover transactions for the sale of nearly every type of goods. Generally, purchase agreements are used for the sale of goods that are worth over $500, though they can also be used for smaller transactions. Purchase agreements are very common for the sale of a home or other types of real estate.
In addition, purchase agreements are common in the telecommunications industry. For example, a consumer may purchase various communications packages, in which case the agreement is known as a “volume purchase agreement”.
What is Included in a Purchase Agreement?
A well-written purchase agreement should include all information that is relevant to the transaction. It should be clearly-written so as to avoid any misunderstandings regarding the various terms.
Some information that should be contained in a basic purchase agreement may include:
- Information regarding the buyer and seller, including names, phone numbers, and addresses
- Contact information for any witnesses or co-signers
- The type of sale and the product or goods involved
- Price and quantities for the sale
- The date of the agreement and terms related to duration
- Terms for delivery and shipping (if applicable)
- Dates covering the fulfillment of various conditions and requirements
- Whether the agreement can be amended or revised in the future
- Whether litigation is an option in the event of a legal dispute
Thus, purchase agreements are generally much more complicated than a simple invoice or purchase receipt (bill of sale). The agreement usually outlines the various conditions that each party needs to fulfill in order for the sale to be completed.
What are “Absolute” Versus “Conditional” Purchase Agreements?
An absolute purchase agreement is basically similar to a receipt- it doesn’t place any restrictions or conditions on the buyer, and simply states the basic terms of the transaction. This may be used for the purpose of keeping records of the transaction, and if a return on the product is needed.
In comparison, conditional purchase agreements generally have to do with security deposits and the securing of loans. Conditional purchase agreements generally allow the seller party the right to take possession of an item or piece of property that was used in securing a loan. An example of this is when a home is foreclosed in connection with a real estate mortgage.
Disputes over absolute or conditional purchase agreements can often lead to a lawsuit. In most cases, the legal remedy includes a damages award intended to reimburse the non-violating party for any economic losses that they incurred.
Do I Need a Lawyer for Help With a Purchase Agreement?
Purchase agreements are used very commonly, from very simple transactions to complex business or real estate agreements. If you need assistance in drafting or reviewing a purchase agreement, you should speak with a business attorney immediately. Your lawyer can help you with the various aspects of the purchase agreement, to ensure that your interests are being met fully. Also, in the event of a legal dispute, your lawyer can represent you in court if you need to file for a damages award.