A purchase agreement is the final conclusion drawn to a purchase transaction between a vendor who sells his products or a set of services and a consumer who buys the products and services. Such a transaction is validated on a reasonable pay which is fixed between the parties in the agreement. So that the parties are certain about the amounts purchased and money paid against it, the entire deed is adapted into a document which holds an official, legal and commercial meaning. This is necessary to incapacitate the parties from raising an altercation regarding the transaction afterwards. The document must be constructed very tightly without giving any chance to development of uncertainties or doubts and by virtue of which the court can take actions against or in favour of the parties involved.
The documented edition of the purchase agreement has to make use of certain terms that are both legally accepted and easily understood by laymen (read parties). The general terms and conditions are translated into official statements that are incorporated into the file. The following are the main workings of the agreement structure:
- The names and descriptions of the parties including the company name are important in order to enable the court in identification of the involved parties.
- The definition of the agreement is to be provided which would state the premise of the transaction in one sentence.
- The concerned product or service inventory has to be laid out in the right format revealing their details.
- It must provide a condensed account of the payment related issues such as payment done, payment due, payment type, payment laws and payment time.
- The specific clauses regarding the purchase have to be enunciated especially those regarding defects in the product, warranties made in support of it and discrepancies in the elements of the agreement.
- The process of relocation of the product and final date and place of payment will have to be programmed as that would restrict dispute and will close the deed peacefully.
- The deed will have to be signed by the parties with proper dates in the attendance of legal representatives.
The use of the document is somewhat related to its workings and ensures that:
- All purchases are entered into the record book(1) of the government to stall evasion of taxes.
- The rights of the parties as a seller and as a buyer are preserved through it.
[Also Read: Asset Purchase Agreement]