How to Create a Purchase & Sales Agreement

If you are trying to purchase or sale anything, it is strongly recommended that you do not engage in any such activity without entering a formal agreement. A formal agreement plays a strong role in making the sale and purchase official and helps both parties in defending their rights. It not only ensures that the terms of sale and purchase are being followed but also serves as a strong tool in the protection of rights of both parties. Not to mention that every single word of the agreement has legal value.


  • 1

    Mentions the details of both parties

    An agreement cannot be valid until you mention the names of both parties involved in the sale and purchase. It is of considerable importance that you should know the full name of both persons involved in the agreement along with their social security number. If the agreement is between legal entities then you should enter the complete name of the company.

  • 2

    Mention the product

    You should not underestimate the significance of mentioning the name of product that is to be involved in sale /purchase. The law requires that you should provide each and every detail of the product in the agreement. For example, if you are selling your car, then you must mention its model number, registration number, its colour and the condition of the car. If you are going to sell multiple products then you are required to give complete details and specifications of all products.

  • 3

    Specify the quantity and warranty

    After you have clearly mentioned the details of product(s), you must specify the quantity of the product that is being purchased by the other party. Similarly, you should specify the warranty of product,, if there is any. If you want to give your personal warranty for a specified period then you can also do that.

  • 4

    State your liability limit

    It is mandatory on the part of the seller that he/she should state the extent of their liability if the product is found defective or malfunctioned.

  • 5

    Mode and terms of payment

    After everything is in its place, it is important that you should decide the mode and terms of payment. For this, you should talk to the other party in detail and then mention it in the agreement.

  • 6

    Sign the agreement

    Now both parties should sign the agreement and make it valid.

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