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Guide to Drafting a Sales and Purchase Agreement

Small businesses use a sales and purchase contract as a binding contract in their transfer and sales transactions. It is the contract that allows the seller or buyer to either agree or disagree with the terms. It can lay out the details of a consultancy service and high-quality insurance products.

Knowing which terms are vital is crucial when drafting or reviewing a sales or purchase agreement. That helps protect your interests and avoid potential problems with purchase or sales transactions down the road. After all, this is the contract that lays out the terms of purchase or sale of a service or item. It is the document that identifies the seller, the buyer, the service or product, and other terms. Above all, these are some of the elements to consider when drafting either a sales or purchase agreement:

Delivery Instructions

One reason why transactions fall apart is late delivery or delivering to the wrong recipient or location. That’s why it is crucial to make the delivery location, date and time of delivery, and the party responsible for the risk of damage or loss during transit clear in a sales or purchase agreement.

Goods Description

Products and services description is an essential term in a purchase or sales contract. It helps reduce the room for error with the description, but it has to include the exact insurance products that you want to sell or buy, as well as any other relevant details. Product description ensures that the seller delivers the right product or service to the right recipient. Problems with other terms of the deal can resolve themselves as long as the client gets the service or item they have bargained for.

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Warranties

Buyers tend to overlook the warranties that vendors offer them. There are no standard warranties; instead, they vary across industries. Make sure to review the promises that your seller is offering before entering into a contract. The seller could be disclaiming fitness or merchantability warranties for a purpose or could be selling the insurance products as they are. If that is the case, any verbal promise about the service or product won’t stand.

Inspection Period

Sales and purchase contracts often have an inspection period. It is the period that gives the buyer time to inspect a service or product after delivery and reject anything that doesn’t meet the standards. However, this period can vary depending on the nature of the consultancy service or high-quality insurance products. For example, buyers are required to reject or accept items with short shelf life, such as perishable food items upon delivery.

Sales and purchase agreements are often used when buying or selling insurance products or consultancy services. A sales and purchase agreement is drafted after the buyer makes an offer and the vendor accepts it. It is the document that lays out terms such as the deposit amount, closing date, and situations that can warrant cancellation of the contract.

Sales and purchase agreements are usually drafted by either the escrow agent or attorney responsible for handling the closing process. However, some situations may warrant a homeowner to write a sales or purchase agreement when selling or purchasing a home. But insurance agents should work closely with a qualified attorney for guidance.