Creating Purchase and Sale Agreements

Note: Want to skip the guide and go straight to the free templates? No problem - scroll to the bottom.
Also note: This is not legal advice.

Introduction

Creating a legally binding purchase and sale agreement is essential for protecting the interests of both parties involved in any transaction. These agreements provide a written record of the transaction, setting out the rights and obligations of each party, as well as outlining the details such as purchase price, payment terms, warranties and delivery. They also help to avoid disputes which could otherwise arise due to misunderstandings.

As experienced professionals who understand the importance of such an agreement, Genie AI has developed ‘the world’s largest open source legal template library’ to assist people in drafting their own tailored purchase and sale agreements without requiring legal expertise or paying high lawyer fees. With access to millions of datapoints from our community template library, anyone can quickly create and customize high-quality documents that accurately reflect their needs.

At Genie AI we are committed to providing clear guidance on this important task – with step-by-step instructions on how to create your own legally binding agreement – so you don’t have worry about putting yourself at risk or leaving yourself exposed by not having a valid contract in place. Our templates are designed with both parties in mind and help protect your interests during any transaction by including provisions that allow either party to terminate an agreement if payments become overdue or services/goods are not delivered as promised. Furthermore, having a written record is invaluable should any dispute arise down the line; meaning you can confidently move forward with a secure foundation for your transactions today.

Accessing our free template library couldn’t be easier: simply read on below for further information on how you can get started today!

Definitions (feel free to skip)

1. Consideration: Something given or received in exchange for something else, usually money or goods.
2. Obligation: A responsibility or duty to do something.
3. Indemnification: Protection from loss, damage, or liability.
4. Warranties: Promises made by a seller about a product’s quality and performance.
5. Disclaimer: A statement that denies responsibility for something.
6. Confidentiality: Keeping something secret or private.

Contents

• Identifying the Parties
• Establishing the Purchase Price
• Describing the Property
• Establishing an Inspection
• Stipulating Conditions of Sale
• Specifying Warranties
• Determining Transfer of Title
• Providing for Closing
• Establishing Default Provisions
• Establishing Dispute Resolution
• Signing the Agreement

Get started

Identifying the Parties

• Ensure that all parties involved in the transaction are identified, including the buyer and seller, and their contact information.
• If the buyer or seller is a business, make sure to include the name of the business, its address and legal representative.
• Confirm the identities of the parties involved (buyer and seller) with valid identification documents, such as passports, driver’s licenses, and/or government-issued identification cards.
• Once all parties are identified and their identities have been confirmed, you can move on to the next step.

Establishing the Purchase Price

• Discuss and agree upon a purchase price with the buyer and seller
• Include the purchase price in the agreement
• Make sure the purchase price is consistent throughout the document
• Make sure any contingencies or exceptions are clearly stated in the agreement

You can check this step off your list when the purchase price is agreed upon and included in the agreement.

Describing the Property

• List all the features of the property that are included in the sale, such as land, buildings, and fixtures
• Describe the condition of the property, including any problems that need to be addressed
• Include any additional items that may be included in the sale
• When applicable, specify any exclusions or restrictions on the property
• Once you have identified and listed all of the features of the property and the conditions associated with it, you can move on to the next step in the process
• You’ll know you’ve finished this step when you have a comprehensive description of the property ready to be included in the purchase and sale agreement.

Establishing an Inspection

• Determine what type of inspection is needed.
• Agree on who will be responsible for the cost of the inspection.
• Choose an inspector who is qualified to perform the inspection.
• Decide whether to have the inspection done before or after the closing of the sale.
• Have the inspection carried out and report the results to both parties.
• When the inspection is complete, both parties should sign off on the results.

You’ll know when you can check this off your list and move on to the next step when both parties have signed off on the results of the inspection.

Stipulating Conditions of Sale

• Determine the general terms of the sale, such as payment terms, delivery method, and any other relevant information
• List any additional conditions that must be met in order for the sale to be finalized, such as an inspection, a certain number of days prior to the sale, or a signature on a document
• Specify the time frame that the buyer has to meet those conditions in order to complete the sale
• Make sure both parties are in agreement and that any conditions are clearly outlined in the agreement
• When both parties have agreed and the conditions are listed in the agreement, the step of stipulating conditions of sale can be marked as completed.

Specifying Warranties

• Outline relevant warranties that apply to the purchase and sale agreement
• List any warranty disclaimers, such as disclaimers of implied warranties
• Include details regarding the duration and extent of any warranties, and any limitations or exclusions
• Address any additional warranty obligations that may arise, such as those related to maintenance or repairs of the purchased goods
• Specify any requirements for warranty claims to be valid
• When you have included all relevant warranties, disclaimers, and other related terms, you can check off this step and move on to the next, determining transfer of title.

Determining Transfer of Title

• Research applicable local and state laws to ensure the agreement is in compliance with any legal regulations
• Consult with a real estate attorney to discuss the specifics of the agreement and any pertinent legal considerations
• Specify the exact terms of the title transfer, such as who will be responsible for costs associated with the transfer or the transfer timeline
• Include a clause regarding the buyer’s responsibility for maintaining the title
• Sign and date the agreement once both parties have agreed upon the terms of the title transfer
• When the agreement is complete and both parties have signed and dated it, you can check this off your list and move on to providing for closing.

Providing for Closing

• Draft a closing date and identify parties responsible for paying closing costs
• Contact the local government office to determine what documents need to be filed in order to officially register the transfer of title and have the sale recorded
• Include any additional documents that need to be signed or filed in order to complete the closing process
• Confirm the completion of all closing documents and procedures with both parties
• When all documents and procedures are complete, check off this step and move on to establishing default provisions for the purchase and sale agreement.

Establishing Default Provisions

• Research the applicable local and state laws to determine the default provisions that must be included in the purchase and sale agreement.
• Ensure the default provisions are compliant with the applicable laws.
• Draft the default provisions and include in the purchase and sale agreement.
• Ensure all parties involved in the agreement are aware of the default provisions and agree to the terms.

When you can check this off your list and move on to the next step:

• When you have completed the research, drafted the default provisions, and all parties involved have agreed to the terms.

Establishing Dispute Resolution

• Determine which method of dispute resolution to include in the agreement; options include negotiation, mediation, arbitration, or litigation
• Draft the dispute resolution clause, including the type and method of dispute resolution, the parties’ obligations, and the governing law
• Ensure the dispute resolution clause is in compliance with local laws
• Once the dispute resolution clause is agreed upon and included in the agreement, you can check this off your list and move on to the next step, Signing the Agreement.

Signing the Agreement

• Get the parties to sign the purchase and sale agreement in front of witnesses and a notary public
• Make sure that all parties have a copy of the agreement and that all signatures are witnessed
• Once all parties have signed and the document is notarized, the agreement is legally binding and enforceable
• Check off the task of signing the agreement when the notary has completed the process and all copies are distributed

FAQ:

Q: What is the difference between a purchase and sale agreement?

Asked by Robert on June 20th, 2022.
A: A purchase and sale agreement is a legal document that outlines the terms of a transaction between two parties for the purchase or sale of a product, service, or asset. Generally, it will include details about the nature of the transaction, payment terms, and delivery terms. A purchase and sale agreement is different from a contract in that it does not create an ongoing relationship between the parties. It is primarily used for one-time transactions.

Q: Does a purchase and sale agreement need to be in writing?

Asked by Emma on January 2nd, 2022.
A: Yes, in most jurisdictions, it is best practice to have a purchase and sale agreement in writing. This ensures that all parties have clear expectations of the transaction and that any disputes can be resolved more easily. In some cases, verbal agreements may be upheld in court, but this is not always the case - so it’s always best to have written contracts in place.

Q: What are the most important aspects of a purchase and sale agreement?

Asked by Jennifer on April 28th, 2022.
A: The most important aspects of a purchase and sale agreement will depend on the specific circumstances of the transaction. Generally speaking, though, it should include details about how the product or service will be delivered, payment terms (including when payment is expected), any warranties or guarantees associated with the product or service, any applicable taxes or fees, as well as any other relevant information. It should also include details about how disputes will be resolved if they arise.

Q: What should I consider when creating a purchase and sale agreement?

Asked by Matthew on August 14th, 2022.
A: When creating a purchase and sale agreement there are several key factors to consider. First, you should make sure that all relevant details about the transaction are included in the document - such as payment terms, delivery terms, warranties/guarantees etc. Additionally, you should consider who will be responsible for certain aspects of the transaction (such as taxes and fees) and ensure that these are clearly outlined in the document. Finally, you should consider how disputes will be resolved if they arise. Dispute resolution clauses can help protect both parties in the event of a disagreement.

Q: How do I ensure my purchase and sale agreement is legally binding?

Asked by John on September 6th, 2022.
A: To ensure that your purchase and sale agreement is legally binding it must meet certain criteria - such as being signed by both parties involved in the transaction and including all relevant details about the transaction (payment terms, delivery terms etc). Additionally, it must demonstrate an intention to create a legally binding relationship between both parties - which can usually be done through language such as “This agreement shall be binding upon both parties” or similar wording. Finally, all relevant laws and regulations must be followed in order for an agreement to be legally binding - so you should make sure you are aware of any applicable laws before signing an agreement.

Q: Do I need to register my purchase and sale agreement?

Asked by David on October 3rd, 2022.
A: Generally speaking, no - most purchase and sale agreements do not need to be registered with any government agency or other body in order for them to be legally binding. However, if your situation requires it (such as if you are selling real estate or other assets) then you may need to register your agreement with relevant authorities before it is legally binding - so always check with your local laws before signing an agreement to make sure everything is in order.

Q: Is there a standard format for creating a purchase and sale agreement?

Asked by Mary on December 1st, 2022.
A: No - there is no single ‘standard’ format for creating a purchase and sale agreement as each one will depend on the specific circumstances of each transaction. However, there are some basic elements which should always be included such as payment terms, delivery terms etc., so make sure to include those when creating your own agreements. Additionally, if you are unsure what kind of information needs to be included then it might be worth consulting an attorney who specialises in contract law to make sure everything is done properly.

Q: Can I make changes to an existing purchase and sale agreement?

Asked by Joseph on November 5th, 2022.
A: Yes - changes can usually be made to existing agreements provided both parties involved agree to them. However, depending on the jurisdiction you are operating in there may be certain restrictions on what kind of changes can be made - so always check with local laws before making any changes to an existing contract or agreement. Additionally, it’s important to remember that any changes must also meet all legal requirements for a contract/agreement to be legally binding – so again it’s worth consulting an attorney if you’re unsure about anything before making any changes.

Q: Are there different types of purchase and sale agreements?

Asked by Ashley on July 12th, 2022.
A: Yes - there are several different types of purchase and sale agreements depending on what type of asset/product/service is being sold/purchased and where it takes place (as certain jurisdictions may have different laws). Common types include real estate contracts (for buying/selling property), stock sales contracts (for buying/selling stocks), employment contracts (for hiring employees), product sales contracts (for buying/selling products), software licenses (for licensing software) etc., though there are many more types out there depending on what type of transaction you’re looking at entering into.

Q: What happens if one party breaches the terms of their purchase and sale agreement?

Asked by Jessica on August 19th 2022
A: If one party breaches their obligations under a purchase and sale agreement then this could have serious legal consequences depending on what was agreed upon in the contract itself (such as fines or damages). Generally speaking though, both parties should seek legal advice from an experienced attorney who specialises in contract law if they believe someone has breached their obligations under an existing contract – this way they can assess their options for enforcing their rights under said contract or seeking damages for breach of said contract etc.

Q: What happens if I want to terminate my purchase and sale agreement?

Asked by Michael on May 1st 2022 A: If you wish to terminate your existing purchase and sale agreement then this will depend on what was agreed upon within said contract itself – some contracts may allow either party to terminate at any time while others may require certain conditions being met before termination can occur (such as payment being received). Additionally, if termination occurs due to breach of contract then this could also result in legal repercussions depending on what was agreed upon within said contract – so again it’s best practice to seek legal advice from an experienced attorney who specialises in contract law before trying anything like this yourself

Example dispute

Lawsuits Referencing Purchase and Sale Agreement

• Plaintiff may reference a purchase and sale agreement to prove that the defendant has breached their contractual obligations.
• Plaintiff must prove that there was a valid agreement in the first place, and must provide evidence that all parties agreed to the terms of the agreement.
• Plaintiff must also prove that the defendant failed to fulfill their obligations under the agreement, such as failing to deliver goods or services according to the agreement.
• Plaintiff must provide evidence that they suffered damages as a result of the breach of the agreement.
• Settlement may be reached through negotiation or mediation, or the case may be taken to court where a judge may order the defendant to fulfill their obligations, or require them to pay damages.
• Damages may include any losses suffered by the plaintiff due to the breach of contract, as well as any expenses incurred in attempting to rectify the breach.

Templates available (free to use)

Equipment Purchase And Sale Agreement
Hotel Purchase And Sale Agreement
Loan Purchase And Sale Agreement
Master Power Purchase And Sale Agreement
Memorandum Of Purchase And Sale Agreement
Property Purchase And Sale Agreement
Standard Form Purchase And Sale Agreement

‍