Contract, Research Paper Example

Introduction

A purchase agreement is a written agreement that is geared towards setting forth the terms and conditions for the sale and purchase of a good or service. It should not be overly advantageous to one party or the other (Graham & Shaffet, 2007).

The Elements of this purchase agreement includes the following:

1. The title of the document i.e. Purchase Agreement for Retail Estate
2. The name of the marketing firm which is RealtyBid International in this case
3. Unique event number and date of delivering the agreement
4. A provision for the identification of both the buyer and the seller
5. A provision for the indication of the deposit and the closing date of the deal
6. The representatives of both the seller and the buyer
7. The recitals
8. The method of payment which is either by cash or through financing
9. The conditions of sale
10. Title and Closing adjustments on title, encumbrances, title insurance, settlement cost, transfer charges
11. The Possession of the property
12. Warranty
13. Terms of the contract such as effective and expiration date or time.
14. Taxation provisions i.e. taxes assessed in the year prior to the acceptance of the agreement shall be paid by seller whereas those that are assessed for the current calendar year will be shared be shared between the buyer and the seller prior to the closing
15. Defaults and legal remedies
16. Miscellaneous
17. Expiration of the agreement
18. Acceptance of the offer until agreement in fully executed (seller has accepted to sell the property)
19. Acknowledgements i.e. buyer and seller acknowledges that RealtyBid.com is not an agent to any party but acting as a marketing firm only
20. Authorized signatures e. signature from all parties, their names in print, title and the date for all parties

Deposit and Payment terms

The deposit is supposed to be submitted by the buyer and it shall be 15% of the total price. In the event that the 15% is less than $2,000.00, then the buyer has no choice but to give the deposit of $2,000.00. The methods of payment are two. First is by cash and the second is by financing. It is the responsibility of the Closing Agency to put this money in the escrow account to await the closing of the transaction or the termination of the transaction by either the buyer or seller. This serves as a protection for all the parties involved (Geier, 2004). However, the deposit must be in the form of a cashier’s check or certified check.

Conditions of Sale

Any defect or faults will not constitute any claim from the buyer, so long as they did not take place after the signing of the purchase agreement (As-Is condition). Therefore the buyer has to confirm that he/she has not relied on any information from another party may it be the seller or its agents on the state of the premises in question. It is also agreed that the seller must gain at least a dollar from the transaction. On his own will, the seller can terminate the transaction. This will give the buyer back his deposit therefore lifting the two parties from the purchase agreement.

Possession of property  

The right of occupancy shall be delivered to the buyer upon the closing of the transaction. The only catch here is that the buyer must allow the same privileges to the tenants and other parties in possession, may it be of need. Possession of the property is delivered to the buyer upon the closing of the transaction and submission of the relevant funds.

Remedies

This section states the conditions and events which can lead to a default and the actions to be taken to remedy the situation or the restrictions on the remedies most appropriate to either of the parties. It also touches on the penalties that apply to the cancellation of the transaction by either the buyer or the seller.. The parties have to agree on a penalty that has to be paid in the event that one of them does that. In case the seller terminates the agreement in accordance with the provisions of the addendum or the agreement or is unable to give the title of the property to the buyer, the seller must return the deposit to the buyer. If the buyer fails to deliver his end of the bargain, his deposit is to be used as compensation to the seller to cater for liquidated damages.

Conclusion

The language used in a contact is straight forward and authentic. In many cases you might find that some words are repeated so as to emphasis and also for clarity purposes. However, there is the tendency to use hard vocabularies that may not be easily understood by a layman. This is the reason why both the seller and buyer are advised to seek the guidance of their advisors such as an attorney. Prior to the signing of the document, the buyer and seller n should know both the tax and legal repercussions of contract and the transaction involved. The buyer should seek the advice of a civil engineer or any other person who has expertise in property evaluation. The most striking aspect of the purchase agreement is its formality.

References

Graham, F. C., & Shaffett, B. (2007). Purchase agreement. Mississippi State: Mississippi State University Extension Service.

Geier, M. R. (2004). Buy/sell & share purchase agreement. St. Paul, MN: Minnesota Continuing Legal Education.