Purchase Agreement Basics
Purchase agreements are required in a number of scenarios. Interstate commerce requires that purchase agreements are included with any shipments. International commerce requires purchase agreements in order to pass the item through a customs office. The government also requires a purchase agreement for tax purposes.
When buying or selling a car online, you need to gather, complete and exchange specific documents before a sale can be finalized. The bill of sale — sometimes called a purchase agreement — varies slightly according to the vehicle or item you’re selling. There are plenty of online templates that can be used or easily adapted for your transaction. While purchase agreements for a vehicle don’t need to be overly complex, these details should always be included:
- Total purchase price
- Purchase date
- Details as to how payment will be completed – especially if there are multiple payments or payment is contingent on items like repairs, completed projects or inspections.
- Current location and condition of the item being sold
- Description (make, model and any upgrades)
- Odometer reading
- Vehicle identification number
- Name/address of buyer and seller
- Driver’s license number of buyer/seller
- Seller’s statement of vehicle ownership
- Seller’s statement that there are outstanding debts against the vehicle (if applicable)
- Seller’s statement that there are no outstanding debts against the vehicle (if applicable)
- Item(s) being sold and any warranties or representations, or whether the item is being sold ‘as-is’
- Dated signatures of the buyer(s) and seller(s)
- Jurisdiction of disputes
Aside from the bill of sale and title, the seller should provide warranty details, maintenance records and any other documentation before the final sale of the vehicle. The seller should also cancel insurance for the vehicle once the sale is final. While usually not required, notarizing all paperwork to validate signatures is wise.
This written agreement allows both the buyer and the seller to plan for the worst-case scenario. While most transactions occur seamlessly, preparing for everything else guarantees that both parties can rest easily knowing that a plan of action is in place.