The purchase agreement is a legal document that is used in the United States of America for recording the final agreement between a buyer and a seller specifically in terms of the purchase of the selected products. This kind of agreement clearly details and highlights the terms and agreements as discussed between the two parties. This agreement also furnishes the necessary information related to the product and the target purchase to be made.
The purchase agreement broadly deals with the act of purchasing good and services. Therefore, the specific terms and conditions for both the buyer and seller are mentioned in this document. These purchase agreements can be used for various products and services and in the U.S it is most popularly used for real estate and power supply.
- Real Estate Purchase Agreement: Here, the purchase agreement serves as a binding contract between the buyer and seller where the document clearly stipulates the conditions which the buyer needs to follow for the purchase of the property. The seller is also given specific conditions that must be followed for the transaction to be completed.
- Power Purchase Agreement (PPA): The power purchase agreement also serves as a contract between the supplier or generator of electricity and the organization looking to buy it.
The purchase agreement, thus, is very important and requires carefully precision and professionalism in its drafting and formatting. It is essential to keep certain points in mind while formulating the purchase agreement:
- This document must list the names of both the buyer and seller according to their legal official names.
- A small statement of purpose must be followed after this, where the intent of this agreement must be clearly highlighted with regards to the purchase and sales to be made. There should also be a clear mention of the aims and objective from both parties.
- The terms and conditions of the buyer and the seller should be highlighted distinctly in the purchase document. In case of failure to adhere to the stated terms and conditions, legal actions can be taken from both sides.
- The details of the product or service and the target purchase to be made should also be mentioned here to avoid any confusion in the near future. The document must contain simple and coherent language(1) to ensure that all guidelines have been understood.
- Lastly, the purchase agreement document will be required for future legal and recording purpose and hence its structuring must be done extremely carefully.