Document background
The Advance Purchase Agreement is a critical commercial document used when a buyer needs to secure future delivery of goods or services by making advance payments to the seller. This arrangement is particularly common in industries with long lead times for production, custom-made items, or where significant upfront costs are involved. The document, governed by Danish law, provides comprehensive coverage of payment terms, delivery obligations, quality requirements, and risk allocation. It includes specific provisions required under Danish contract law (Aftaleloven) and the Sale of Goods Act (Købeloven), addressing matters such as payment security, interest rates, and remedies for breach. The agreement typically incorporates various security mechanisms to protect the buyer's advance payments and ensures clear allocation of risks and responsibilities between parties. It's especially relevant in scenarios involving manufacturing, large-scale procurement, or situations where securing future supply is crucial to business operations.
