Forming a business or entering into a transaction often requires the preparation and execution of multiple legal documents. It may feel like unnecessary paper pushing, but trust us – you need these. One such essential document is the Purchase Agreement. You might be wondering, "What exactly is a Purchase Agreement, and why do I need one?" or "Do I always need a Purchase Agreement?" In this article, we are going to break it down for you, step-by-step, to explain the Purchase Agreement and underscore its importance.
A Purchase Agreement, often also known as a Sale Agreement, is a legal document that lays out the terms and conditions related to the sale of goods or assets. It details the purchase price, the description of what is being purchased, and the obligations of both the buyer and seller. Most importantly, it serves as a legal record of the transaction, offering protection to all parties involved.
It’s generally a good idea to have a Purchase Agreement whenever you're buying or selling something of significant value such as a new car, house, or even a business. Low-value items simply aren’t worth the time and the money of drafting another contract. That being said, it's crucial to err on the side of caution. If you're unsure whether you need a Purchase Agreement, it's best to consult with a legal professional.
Purchase Agreement are most commonly used when:
Buying a business
Buying or selling significant assets
Dealing with real estate transactions
Entering into a complex or long-term supply arrangement
While it's possible to draft a purchase agreement on your own, it's usually advisable to seek legal guidance to ensure all legal bases are covered. However, for more straightforward transactions, templates can be helpful. Be sure to consult with a professional to ensure the document aligns with your business needs and is legally sound.
You can get one of our Purchase Agreements below by clicking on the relevant link:
Additionally, we have 100+ other contract templates, along with a step-by-step, interactive platform to help you start your LLC, check out our LLC Starter Pack.