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Download purchase agreement template in Microsoft Word format.
Validate Your Transaction with a Purchase Agreement Form
If you plan to sell an item privately there are several factors to consider before you start the process—factors that will ensure you are wholly protected against financial loss and liability. These factors are the items typically addressed in a purchase agreement form, and here, to help you better understand this document we will briefly define its purpose and outline some of the items and language it typically contains.
What Is a Purchase Agreement Form?
A purchase agreement form, also known as a sales agreement form, is a written and legally binding contract between a buyer and seller in which the details of a future sale are agreed upon, and the precise terms of the transaction are specifically outlined. These terms could include items such as price, down payment and payment terms, along with a release of liability and various consequences that will be enforced should the agreement not be honored.
You may have notice the word “future” above was italicized and highlighted. This was done intentionally to make the distinction between a purchase agreement and a bill of sale. While purchase agreements should be drafted prior to a transaction taking place, a bill of sale is more like a receipt, which is drafted after the goods have already been delivered and paid for. Bills of sale should never be used until after a transaction has been completed in full.
When and for What Do I Use a Purchase Agreement?
Typically, purchase agreements are drafted when the buyer lacks the financial resources to purchase the item you are selling in full. Items that might normally require a purchase agreement include:
- Automobiles
- Boats and other watercraft
- Recreational Vehicles
- Furniture
- Tools and equipment
- And more…
While the purchase agreement can be used for almost any item you wish to sell, it should NOT be used in the sale of real estate or real property. These transactions are much more sensitive and require a contract significantly more complex.
What Items Should Appear in a Purchase Agreement Form?
The purchase agreement should first include the names and contact information of each of the two parties involved in the sale. This would normally be followed by a full description of the item(s) being sold, and the final purchase price. Next would come the terms, addressing items such as the down payment, the amount of each subsequent payment, the date that payment should be made each month, late fees and, if applicable, interest. This section is where you can also list any warranties or guarantees you wish to offer the customer.
The final part of the contract should list the delivery information that will be needed once the item has been paid in full, including the address where the item should be shipped or delivered, along with the delivery date and time.
The purchase agreement form is intended to protect both buyer and seller by clearly spelling out the terms of the transaction. And should either of the parties dishonor or breach the contract, compensation for that breach can be sought in a court of law.