A purchase agreement (SPA) is a legally binding contract between two parties that provides for a transaction between a buyer and a seller. SPAs are generally used for real estate transactions, but can be found in all areas of activity. The agreement concludes the terms of the sale and is the result of negotiations between the buyer and the seller. A contract of sale and purchase (SPA) is a legally binding contract that describes the agreed terms and conditions of the buyer and seller of a property (for example. B an enterprise). It is the most important legal document in any sales process. Essentially, it sets out the agreed elements of the agreement, includes a number of important safeguards for all parties involved, and provides the legal framework for the closing of the sale. The SPA is therefore crucial for sellers and buyers. Essentially, the purchase agreement sets out all the details of the transaction so that both parties share the same understanding. The terms generally included in the agreement include the purchase price, the closing date, the amount of serious money that the buyer must submit as a down payment and the list of items included in the sale and not.
SPAs are used by large publicly traded companies in their supply chains. An SPA can be used when a large number of materials are purchased from a supplier or in the case of a large individual purchase. For example, 1,000 widgets, all delivered at the same time. In another example, an SPA is often required in a transaction where one company acquires another. Since the SPA determines the exact nature of what is being bought and sold, the agreement may allow a company to sell its tangible assets to a buyer without selling the naming rights associated with the business. As part of the negotiation process, a final sale price is agreed by both parties. In addition, other elements relevant to the transaction are also included, such as. B a closing date or unforeseen events. If more specific risks are identified during due diligence, it is likely that they will be covered by appropriate compensation in the purchase agreement, where the seller promises to reimburse the buyer for delivery-by-pound indemnification liability. .