How to Prepare a Short Sale Purchase Agreement

It is challenging to draft a good short sale purchase agreement, even if you are a lawyer. The lower the value of the goods being purchased, however, the easier it is to draft an agreement that is appropriate to the transaction. Nevertheless, careless errors or drafting without consideration of the legal environment could result in unpleasant surprises if the agreement ever becomes the subject of litigation.

Things You'll Need

• Sample sale and purchase agreement

Instructions

1. Place the title of your contract at the top of the first page. Be concise and direct. "Sale and Purchase Agreement" is sufficient.

2. Start with a paragraph titled "Preamble" at the top of the page. Identify the parties to the contract by name, address, and either social security number (for individuals) or employer identification number (for companies). Designate each party as either "Buyer" or "Seller", and use these shorthand terms everywhere in the agreement except below the signature lines. State that the parties have entered into the agreement for the sale and purchase of the "product(s) listed herein".

3. Create Section 1 and title it "Products" (or "Product" if only one type of product is being purchased). Describe the products in detail using make, model number, or other distinctive designation. List the quantities of each type of product being purchased, and the unit prices for each. Capitalize the word "Product," and use the capitalized version throughout the agreement as a special designation for any generalized references to the products being sold. If the products being sold are numerous, feel free to list them in an appendix, and use Section 1 to define "Products" as "the products listed in the Appendix to this agreement."

4. Add Section 2, titled "Price and Payment," which should list the aggregate price and the method of payment. If the products are being delivered or paid for in installments, details should be listed here.

5. Include a warranties section detailing any seller warranties as to the quality of the product, and any refund or exchange policies. Any disclaimers of legally implied warranties such as the Implied Warranty of Merchantability should be listed here in all capital letters.

6. Insert standard contractual housekeeping provisions such as governing law and dispute resolution.

7. Identify the people entitled to sign the contract. Individuals may sign in their own capacity, while a company must designate an authorized representative to sign on its behalf (a company officer will almost certainly have the authority to sign on behalf of the company). Create a signature section with dotted lines for signatures, individual names immediately underneath, and titles such as "Vice President" on the bottom line followed, by company name if the party is a company rather than an individual.

Tips & Warnings

• There is no need to use the exact wording suggested above as long as your wording is clear, unambiguous and equivalent in meaning. The foregoing instructions are intended only as a set of guidelines and examples.

• Don't use a sales agreement that you have downloaded from the Internet without modifying it to fit the details of your particular transaction.

References

• AllBusiness.com: Understanding Sales Agreements
• Uniform Commercial Code: Article 2 - Sales

Resources

• FindLaw.com: Samples Sales Contract
• T-TLaw.com: Sample Contract Boilerplate Provisions