What is a Purchase Agreement?
A Purchase Agreement, also called a Purchase and Sale Agreement or Purchase Contract, is a two-sided legal document that outlines a sales agreement for goods. Purchase Agreements are more than a simple sales receipt or Bill of Sale.
While a Purchase Agreement does include the basics, such as what item is being sold and the purchase price, it also includes protections for the buyer and seller. For example, it can require a seller to state, in writing, that they have the right to sell the property and that it does not have a lien or other burdens that would interfere with the sale of the property.
The Rocket Lawyer Purchase Agreement template can be used to document the sale and purchase of nearly any type of good. This contract, however, is not well suited for selling services. Purchase Agreements are most often used in high value or larger transactions because they offer some protection to the buyer and seller. Common transactions that benefit from a Purchase Agreement include purchases of real estate, business assets, vehicles, valuable items, jewelry, artwork, or guns (where allowed).
When to use a Purchase Agreement:
- You would like to sell goods, assets, property, etc., and want it documented in writing.
- You are taking part in a larger transaction and want it documented so both you and the seller are protected.
hereby sell, assign, and transfer to
This transfer is effective as of .
The property is now located at , and all of such property is in the possession of .
[SIGNATURE PAGE FOLLOWS]
This Purchase Agreement shall be signed by on behalf of , and by on behalf of .
Purchase Agreement FAQs
What are Purchase Agreements used for?
A Purchase Agreement can be used to document the sale and purchase of nearly any type of good. A Purchase Agreement, however, is not well suited for selling services. Purchase Agreements are most often used in high value or larger transactions because they offer some protection to the buyer and seller. Common transactions that benefit from a Purchase Agreement include purchases of real estate, business assets, vehicles, valuable items, jewelry, artwork, or guns (where allowed).
This Purchase Agreement is for general purposes, but we also offer contracts for specific uses, such as:
- Purchase Agreement for Personal Property
- Property Sales Agreement
- Business Sale Agreement
- Stock Purchase Agreement
- Franchise Purchase Agreement
- Asset Purchase Agreement
- Real Estate Purchase Agreement
If you are selling a service, see the service contracts available in the Rocket Lawyer document library.
How do I make a Purchase Agreement?
You can make a Purchase Agreement for free with Rocket Lawyer. Use the Purchase Agreement document if:
- You're buying goods and want written proof of the agreement.
- As a buyer, you want assurance that the seller has the legal right to sell the goods.
- As the seller, you want to document payment agreements.
This Purchase Agreement document can be used to make a contract between individuals, married couples, businesses, or trusts. The Rocket Lawyer document builder can make a Purchase Agreement that works in every state.
What information do I need to make a Purchase Agreement?
The Rocket Lawyer document builder is easy to use. You simply submit a bit of information and the legal language is automatically generated for you. Documents are often tailored to the state where the transaction will happen.
You may need to submit the following information to make your Purchase Agreement:
- Buyer and seller information, such as name, address, and whether they are an individual, business, or trust.
- What is being sold, or a legal description of property.
- Purchase price, amount of earnest money, and whether the buyer will be acquiring financing.
- Whether the property is asserted to be free of liens or other encumbrances.
- If the seller will be making any warranties.
- When the property will be transferred.
Please note: Documents vary depending on the state. If the generated document doesn't seem to fit your needs, you may want to try one of the more specific Purchase Agreements listed above.
What is the difference between a Purchase Agreement and a Bill of Sale?
A Bill of Sale documents a transfer of property and often an exchange of money whereas a Purchase Agreement is usually made before money is exchanged and includes specific requirements both the seller and the buyer must meet before the property ownership is transferred. For example, if you need to ensure that the seller has the right to sell the property that they are offering, a Purchase Agreement includes those provisions. However, you might use a Bill of Sale if you paid for a used car, have the signed-over title in-hand, and will be requesting a title transfer from the DMV.
Do I need a lawyer to make a Purchase Agreement?
No. You can make a Purchase Agreement using Rocket Lawyer and have it signed by the appropriate parties to make it valid. If you feel it adds extra assurance, you can ask for a witness signature or an affidavit that declares that the signer saw you and the other party sign the document. If the Purchase Agreement is for a large purchase, such as for real estate or a business purchase, you may benefit from having a lawyer look it over before it is signed as an added layer of protection. In the event of a dispute, a lawyer can help you file for damages.
How long is a Purchase Agreement valid?
A Purchase Agreement can and may include a date for when the agreement expires.
Do I have to pay taxes on items sold person-to-person?
In most cases, yes. The IRS and your local tax agency expect you to report any gain on property sold. You can also deduct losses. You are expected to pay your tax obligation on any property you sell, such as real estate, land, vehicles, or other assets. To learn more, see Do I need to pay taxes on private sales transactions.
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