What Is a Transaction Agreement?
If you want to sell your company’s goods and services or you are interested in buying certain services from another company, then you need to sign a transaction agreement with the company. You will be able to layout a full exchange scope in the agreement. It also protects the rights of both companies.
When Do You Need a Transaction Agreement?
This agreement is taken by two companies that are involved in buying or selling their goods and services. The document mentions the duties and responsibilities of each company clearly to avoid any misunderstandings later.
Purpose of a Transaction Service Agreement
The major purpose of the agreement is to allow the buyer and the seller to have proof of the transaction of goods and services. If a company has signed the agreement, then that company can’t demand a change in guidelines later.
How to Draft Transaction Agreement?
- The delivery and inspection terms of the company are required to be mentioned clearly.
- There should be a proper understanding of the product or services which are transacted between two companies.
- Liability limits, guarantees, notices, amendments, and confidentiality of the agreement should be mentioned clearly.
Benefits of Transaction Agreement
- The first benefit of signing the agreement is that the two companies are able to acknowledge their rights and payment clearly, including the services and goods delivery.
- The payment time mentioned in the agreement makes it easier for the seller to trust Buyer Company.
- There isn’t any drawback of the agreement until you forget to read it properly. All the guidelines mentioned in the agreement should be read properly, and after that, you can sign it.
Key Terms/Clauses in Transaction Agreement
A standard transaction agreement would include
- The major contents of the agreement include the seller and Buyer Company’s name and details.
- The payment instructions are also mentioned clearly in this agreement.
- The services or goods which need to be exchanged are added to the agreement.
- The payment mode which is agreed by both the companies.
- The delivery instructions including the whom to hand the responsibility over to, and what constitutes handing over of responsibility
- Liability of delivery and when performance is deemed completed.
- The liability sharing in case of any goods that are lost or stolen
- Permissibility of changes after the contract comes into place and the steps to effect those changes in the contract
- The state laws that govern the agreement, and the performance of the contractual obligations subject to those state laws.
If any company wants to negotiate the rules and obligations mentioned in the agreement, then a legal attorney can help you to talk to the opposite party in a better way. However, once you have agreed upon certain rules stated in the agreement, then you can’t back off.
What Happens in Case of Violation?
If the buyer company doesn’t make the payment on time, then there are certain penalties that it could call for. These penalties should be mentioned in the agreement. Certain legal actions can be taken as mentioned in the agreement regarding violations.
Now you must have understood this agreement, and you can also use this agreement if you are buying or selling some goods and services with other companies. It will protect you from facing any fraudulent services. Moreover, this agreement is the best way to assure timely payment or services.
Sample for Transaction Agreement
You can download transaction agreement template from below.
Download this USA Attorney made Original Agreement for only $9.99
If you need any alterations or have any queries, please contact us before downloading.