The Purchase Agreement: Elements, boilerplate template, and optional clauses
What is a Purchase Agreement?
A purchase agreement is a legal document that outlines the terms and conditions of a sale between a buyer and a seller. It typically includes information such as the purchase price, payment due dates, property or item being sold, any contingencies or conditions of the sale, and the responsibilities of both parties. The purchase agreement serves as a binding contract between the buyer and seller and helps to protect the rights and interests of both parties.
What are the common elements included in a Purchase Agreement?
- Parties: Identifying information for the buyer and seller.
- Property: Description of the property being sold, including any relevant details such as address, size, and condition.
- Purchase Price: The agreed-upon price for the property.
- Payment Terms: Details regarding how and when the purchase price will be paid, including any deposit, down payment, or financing arrangements.
- Closing Date: The date when the sale is expected to be completed, including any contingencies or conditions that must be met beforehand.
- Contingencies: Any conditions that must be met before the sale can be completed, such as inspections or appraisals.
- Title and Ownership: Details regarding the transfer of ownership and any associated legal requirements or documents.
- Representations and Warranties: Any representations or warranties made by the seller regarding the property, such as its condition or legal status.
- Disclosures: Any required or relevant disclosures about the property or its history, such as past repairs or known issues.
- Closing Costs: Details regarding who is responsible for paying the various costs associated with the sale, such as closing fees or transfer taxes.
- Remedies: Any remedies or legal options available to either party in the event of a breach of the agreement.
- Signatures: Signatures of both the buyer and seller, as well as any witnesses or notaries as required by law.
It’s important to note that the specific elements included in a Purchase Agreement will vary depending on the nature of the sale, the parties involved, and any legal requirements in the relevant jurisdiction.
This boilerplate Purchase Agreement template is available at SimpleSignRequest.com
This Purchase Agreement (“Agreement”) is made and entered into as of [date] by and between [buyer_name] (“Buyer”) and [seller_name] (“Seller”).
Seller agrees to sell to Buyer and Buyer agrees to purchase from Seller the property located at [address or description of property] (“Property”).
- Purchase Price.
The purchase price for the Property is [insert purchase price] (“Purchase Price”). The Purchase Price shall be paid by Buyer to Seller as follows: [insert payment terms, such as deposit, down payment, and financing arrangements].
- Closing Date.
The sale shall be completed on or before [insert closing date] (“Closing Date”).
The sale is contingent upon [insert any required or agreed-upon contingencies, such as inspections or appraisals].
- Representations and Warranties.
Seller represents and warrants that [insert any representations or warranties made by Seller regarding the Property, such as its condition or legal status].
Seller has provided Buyer with all required and relevant disclosures regarding the Property, including [insert any known issues or past repairs].
- Closing Costs.
[Insert details regarding who is responsible for paying various closing costs, such as transfer taxes or closing fees].
In the event of a breach of this Agreement, either party may pursue any legal remedies available under the law.
This Agreement may be executed in counterparts and may be signed electronically. Each signature shall be deemed an original and all signatures together shall constitute one instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date first above written.
Buyer Signature: [buyer_signature]
Seller Signature: [seller_signature]
What are some optional clauses that might be included in a Purchase Agreement?
- Earnest Money Deposit: A clause that requires the buyer to make a deposit to show good faith and commitment to the sale. If the sale is completed, the deposit is applied to the purchase price.
- Closing Cost Allocation: A clause that specifies how the various closing costs will be allocated between the buyer and seller.
- Inspection Contingency: A clause that allows the buyer to have the property inspected and to cancel the sale if the inspection reveals any significant issues.
- Appraisal Contingency: A clause that allows the buyer to cancel the sale if the property is appraised for less than the purchase price.
- Financing Contingency: A clause that allows the buyer to cancel the sale if they are unable to secure financing.
- Home Warranty: A clause that specifies whether the seller will provide a home warranty to cover any potential issues with the property after the sale is completed.
- Occupancy Date: A clause that specifies when the buyer can take possession of the property.
- Prorations: A clause that specifies how various expenses, such as property taxes or utilities, will be prorated between the buyer and seller.
- Seller Financing: A clause that allows the seller to finance part or all of the purchase price for the buyer.
- Legal Fees: A clause that specifies which party is responsible for paying legal fees and expenses associated with the sale.
It’s important to note that the specific clauses included in a Purchase Agreement will depend on the nature of the sale and the preferences of the parties involved. It’s always a good idea to consult with a lawyer to ensure that the Agreement is comprehensive and legally binding.