If you buy or sell expensive assets such as ships, land, or buildings, a sales and purchase agreement will save you a great deal of trouble. It is legally binding to both buyers and sellers. Therefore, it enables the two parties to negotiate and come up with the terms of sales that would be acceptable to buyer and seller, and is legally enforceable. These agreements can be used for substantial single transactions or multiple transactions within a specified period.
What is a Sales and Purchases Agreement all about?
The sales and purchases agreement is binding to both parties if they both agree to the terms and conditions in that agreement. The document will show the agreed upon price as well as the other terms of sales. It can also be referred to as a contractual obligation binding both the seller and the buyer.
This document is different from a bill of sale. For sale to be finalised, the conditions must be met first. For the sales and purchase contract to be valid, it must meet the following conditions.
- There must be a buyer and a seller.
- Both the seller and the buyer must agree on the commodity being sold. It has to be a tangible asset or specific goods.
- Both parties must agree on the set monetary purchase price.
Features of a Sales and Purchase Agreement
The sales and purchase agreement must clearly show the details about the parties making the transaction. These include their full names, physical addresses, phone numbers, and details of co-signers if they are available. The dates of the agreement must be displayed. Other optimal details are the type of sale that was used and how much was paid as a deposit. The contract is also expected to list the dates when the agreement will be finalized, followed by the time of actual closing.
The seller must also provide essential details about the properties being sold, including any defect if there is any. A provision that requires the buyer to examine the property or bring specialists to do the same if necessary should also be provided. The seller can also put additional information showing whether or not the assets in question meet the buyer’s expectations after inspection. If the seller does not disclose any defects, the buyer could choose to either change the terms of the contract or terminate the agreement.
If for some reason the sale does not push through, the two parties are supposed to list all the terms that relate to terminating that contract. The agreement should specify that the seller is permitted to sell the assets and transfer his rights of ownership to the buyer. Sellers are obliged to make sure that any loan or any transferable liabilities are settled before the deal is closed.
Buyers and sellers should make all their transactions in a risk-free and secure environment. This is possible if they ensure that they have a legally binding contract that can help them out in case a dispute arises. Therefore, a sales and purchase contract may protect them from undergoing significant losses due to undisclosed concerns about the assets in question or poorly-written contracts.