Purchase Agreement
You will most definitely come to a point in your life when you have to do what the generation of today call as “adulting.” Adulting is new slang word meaning doing things particularly done by adults when you were still a childlike purchasing your own car, renting or leasing your own apartment, paying your bills, so on and so forth.
It requires that you at least know the basics when doing these transactions in order to successfully achieve what you want from these transactions. You may also see commercial agreement examples & samples.
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You should know beforehand that there will be necessary documents needed in order to do business transactions with business entities. For example, when you apply or bid for an apartment lease in your city or state there will be requirements needed from you such as an employment verification or income verification so that the landlord can ensure that you have the capacity to pay the monthly rent.
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You will also need proof for your authenticity, income and license verification before you can successfully when you lease a car or buy a car.
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Business entities will make sure that you are not a fraud and that you can diligently pay your loan or debt for what you have acquired. However, despite the seriousness and difficult atmosphere that comes into doing adult stuff, the fulfillment and satisfaction that comes with doing things on your own is also unparalleled. As long you have the patience to learn how things work, you will do just fine. You may also like business agreement examples.
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What is a Purchase Agreement?
A purchase agreement is a legal document between two parties, the seller and the buyer. The seller is someone who wishes to sell a personal property and the buyer is the person interested to buy the said property. This legal document lays out how the transaction will take place, providing the necessary framework on how the transaction will proceed, what is included in transaction and what is excluded, if necessary. You may also see partnership agreement examples.
It allows both parties to negotiate and eventually come into a mutual agreement as to how the transaction should go or it it should go forward.
A purchase agreement helps describe the terms and conditions regarding the sale and most importantly, it helps ensure that both parties will follow their ends of the bargain. Although a purchase agreement is not a requirement for every transaction, it is an important part of large single purchases or frequent purchases between a specified amount of time. You may also like management agreement examples.
And since it is a legal document, it creates a legal bind between the seller and the buyer that if not met by any party may be punishable by the law. As it would, a purchase agreement is more related to the sale and purchase of goods, rather than services offered by a business entity.
In addition, purchase agreements also contain detailed information about the parties involved in the transaction. That way, the document also serves as a record of all the monetary deposits made as the negotiations move forward, stated in the document that has already been met or completed and as an official record of when the final sale should take place.
Therefore, a purchase agreement is a very important document should you decide to sell your personal property or purchase goods from other individuals or company.
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Contents of a Purchase Agreement
There is a standard in which you have to follow when you make a purchase agreement when you decide to sell a personal property, and these should also be the things you look for when you sign a purchase agreement when you buy things from other individuals or companies transacting a certain business. Here is list of the most common information found in a purchase agreement:
- 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 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.
Difference Between a Purchase Agreement and Bill of Sale
As mentioned earlier a purchase agreement is signed before any property or money is exchanged. It is used only for outlining the terms and conditions applying on the business transaction. It lays down the rules in which both the parties need to comply in order for the transaction to be successful. You may also see service agreement examples.
It is a document stating that both parties have come to an agreement to enter into a future transaction. It also documents the details of what the transaction will be, how it would go and how it should be accomplished.
On the other hand, a bill of sale is during or after the exchange of the property for sale and the money as payment. It also documents the transfer of ownership of the property that has been officially sold fro seller to buyer. Simply put, the bill of sale functions as the official receipt of the entire business transaction. You may also like sales agreement samples.
Therefore, the main difference between the two documents is the stages of the transaction in which they are used and also their major functions. A purchase agreement is signed and agreed upon before the exchange of money and goods; contains all the about the seller, buyer and the property for sale. While a bill of purchase is signed during the actual exchange or after the successful exchange of money and property and acts as the receipt of the transaction. You may also check out how to write sponsorship agreements.
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How to Write a Purchase Agreement
Should you encounter the need to write a purchase agreement in lieu of selling a personal property, here is an easy guide to help you write an effective purchase agreement:
1. Write out the full name of both the seller and the buyer as well as their corresponding information such as phone number/s, address. It should be indicated on the top portion of your agreement.
2. Include and indicate the names of any witnesses or co-signers. as well their corresponding contact information. This will make sure that you have the proper information should you need to go after the person you made the agreement with. This will also verify to the correctness of what is written on the document. You may also see how to write a separation agreement.
3. Indicate what type of sale or business transaction is being carried upon in agreement letter. You also need to indicate the product or goods involved. For example, when you sell your car you have to include the brand, model and year, registration number, and all the necessary information relevant to the product being sold. You may also like website hosting agreement checklist examples.
4. The agreed upon price between the seller and the buyer should be clearly stated in the document. Provide necessary computations, if necessary, especially when you have agreed to indicate the taxable amount or not in the document. You will also need to indicate and determine the exact quantity that is being sold in the transaction to avoid misinterpretations and whatnot. You may also check out why business associate agreement templates are useful.
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5. In this step, you will need to indicate the duration in which the purchase will take place. You can also determine how much the buyer needs to pay should you opt for an installment process of payment. This will help you and the buyer have a clear outline when the last payment will be handed in and if agreed upon, when the product will be given before or after completing the payment. You may also see key differences between agreements and contracts.
6. If necessary, determine the terms of delivery or shipping of the product being sold. If it is necessary to be shipped, indicate that you will additional pay for the shipping fee or if not, determine when and where to pick up the product.
7. If you and buyer has agreed that the product will not be given until the half payment or final payment for the product is given, indicate that in the purchase agreement. If you have certain requirements that needs to be met before the product will be given, state that in the document. Most importantly, indicate when these requirements should be submitted or fulfilled in order to push through with the transaction. This will save you a lot of questions and hassle in the future. You may also like how to utilize rental agreement templates as a landlord.
8. Determine in your purchase agreement if the agreement you have come up with the buyer can be subjected to change due to certain conditions. However, if you don’t want it to be amended also indicate that in the document. This will help you clarify that once an agreement is made, the product is considered as sold and cannot be subject to change or revision. You may also check out checklist the franchise agreement.
9. Indicate whether or not failure to comply to the agreements is subject to litigation should a legal dispute arise during the process.
Conclusion
A purchase agreement is an important document needed when you transact business with other individuals or companies. It helps ensures that the business transaction goes on smoothly and without hassle. Therefore, when you enter into a purchase or selling transaction, make sure you sign a purchase agreement you actually agree with. We hope this guide has helped you with your questions about purchase agreements. You might be interested in checklist for drafting joint promotion agreements.
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