A purchase and sale agreement is one that is entered into between a share broker and a client in order to facilitate trading in futures and options. The agreement comes into existence when the client makes a purchase first and then sells the stock in the futures market. As both the transactions are taking place together the terms and conditions of both the purchase and sale are set out in the agreement before hand.
Some of the essential elements that are covered in the agreement include names and addresses of the parties to the agreement, type of stock being purchased and, type of stock being sold, date of both purchase and sale, duration of holding the stock, commission and brokerage applicable on the transactions, penalty applicable for default on the transactions etc. Due to the dual effect of the transaction it has to be signed by both the parties along with a witness at the need of the agreement to be valid.
[ Also Read: Stock Purchase Agreement ]
Sample for Purchase And Sale Agreement
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