How to Make a Purchasing Agreement

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A purchasing agreement can be between a seller and buyer of a house, or two businesses. You simply can't make this type of agreement orally. It needs to be written down in crystal clear terms on paper and signed by the purchaser. If this is not done, both parties are leaving themselves open to possible disputes regarding payment and terms. The purchasing agreement must contain details about both parties, the amount due, products rendered and the closing date or due date for payment.

Identify the buyer and seller. Include full names, company names and addresses.

Describe the general terms of the agreement in the first section of the purchasing agreement. Just give a general statement regarding the transaction, such as "the seller agrees to convey X goods to buyer with all rights going to the buyer." Include the name and a description of the item being purchased.

Give details about the purchase price. Describe how the purchase price will be paid, such as in installments or in one lump sum payment. Clarify what payment forms will be accepted, such as credit card or certified check. List the due dates for all payments involved in the purchasing agreement.

List all "warranties" or claims of the seller regarding the item being sold. For example, the seller has to proclaim that he does in fact own rights to the item and disclose any liens or other problems that currently exist regarding the item.

Discuss all other specific conditions of the agreement, such as a clause that says that if it is determined that there is a problem with some element of the agreement the entire agreement is void.

Explain how and when physical transfer of the property will take place. Give the exact closing date, time and place where the closing will occur.

Discuss how escrow will be set up if applicable to this purchase. Include the name of the agent where the earnest money will be held and when the funds can be released.

Add any additional provisions that do not fit into the previous sections in a "Miscellaneous" or "Additional Clauses" section at the end of the purchasing agreement. Remember to add a "hold harmless" clause in this section that would release both parties from any claims, debts or liabilities that could arise in association with this agreement.

Close the agreement with a list of representations that are being made about the agreement. This basically says that all statements within the four corners of the contract are true to the seller and buyer's knowledge.

Have both parties sign and date the agreement before a notary.

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