Generate Purchase Agreement
A purchase agreement is a legally binding contract between a buyer and a seller that outlines the terms and conditions of a sale, including price, payment, and delivery details.
What is being sold?
Select the type of item or property being sold.Last Updated February 2023
What is a Purchase Agreement?
A purchase agreement is a legally binding contract between a buyer and a seller that sets out all of the terms and conditions of a sale. Unlike a bill of sale — which records a completed transaction — a purchase agreement covers the entire process, including terms that must be met before the sale is finalized. It protects both parties by clearly defining what is being sold, the price, how payment will be made, and when delivery will occur.
Purchase agreements are used for a wide variety of transactions, from everyday goods and personal property to vehicles, real estate, and businesses.
When do I need a Purchase Agreement?
High-value items: When selling anything of significant value where both parties need legal protection.
Installment payments: When the buyer will pay over time rather than all at once.
Delivery arrangements: When the goods will be delivered at a future date rather than immediately exchanged.
Complex transactions: When the sale includes warranties, services, deposits, or other conditions.
What should I include in my Purchase Agreement?
Parties: Full names and addresses of the buyer and seller.
Description of goods: A detailed description of exactly what is being sold.
Purchase price: The agreed total price, including any applicable taxes.
Payment terms: How and when the buyer will pay (lump sum or installments).
Delivery details: When and where the goods will be delivered.
Warranties: Any guarantees the seller is making about the goods.
Dispute resolution: How disagreements will be handled if they arise.
Frequently Asked Questions
A bill of sale records a completed transaction and confirms that ownership has transferred. A purchase agreement is a forward-looking contract that sets the terms for a sale that will take place — it is signed before or during the transaction. A purchase agreement can include conditions, warranties, and payment schedules that a bill of sale does not cover.
Notarization is generally not required for a purchase agreement to be legally binding, but it may be required in certain jurisdictions or for specific types of transactions such as real estate. Having the agreement notarized adds an extra layer of authenticity and can help prevent disputes about the validity of the document.
When goods are sold "as is," the seller makes no warranties or guarantees about the condition or quality of the goods. The buyer agrees to accept the goods in their current condition and assumes all risk after the sale. This is common in private sales and is typically used when the seller does not want to be held liable for any defects discovered after the sale.
Once signed, a purchase agreement is legally binding and the buyer typically cannot back out without consequences. If a deposit was paid and the agreement states it is non-refundable, the buyer may lose that deposit. The specific consequences depend on the terms of the agreement and the applicable laws in your jurisdiction.
A deposit is an amount paid by the buyer upfront to demonstrate their commitment to completing the purchase. It is credited toward the total purchase price. The agreement should specify whether the deposit is refundable if the transaction does not go through, and the date by which the deposit must be paid.
