A sales agreement is an agreement to buy and sell personal property that include but are not limited to cars, equipment or furniture. The contract confirms that sale and purchase of the asset. This form is not intended for use in the sale and/or purchase of real estate.
Knowing the pitfalls and how to avoid them can save both the seller and buyer headaches down the road. A proper form provides both legal protection and a peace of mind.
What are the main pitfalls and how to avoid them?
1. Never use a handwritten agreement as it is almost always incomplete and contains errors.
2. Never use a free form downloaded from the Internet as it is also almost always incomplete and contains errors.
3. Never agree to sign a sales agreement at time after the transfer of the asset.
4. Never accept verbal promises for payment especially from family and friend.
In all the cases above, a headache down the line may arise for both the seller and the buyer. The seller usually assumes that once they receive the cash they have nothing to worry about. This turns out to be untrue in many scenarios. One such scenario is that the asset sold is not properly described in the sales agreement. The buyer is unhappy at a later date claiming misrepresentation of the asset sold. This may be due to a miscommunication. A lawsuit would ensue that could have been prevented with a proper sales agreement.
A proper attorney drafted sales agreement contains the following main clauses:
1. Proper descriptions of the asset or assets sold.
2. Clearly stating the asset is sold as is and they buyer has thoroughly inspect the asset purchased.
3. Seller warranting they are they legal owner of the asset sold.
4. Amount and terms of payment. This includes dates if payment is to be made in installments.
5. Delivery terms. This may be at the time of purchase or at a later date. This is especially important when dealing with large items.
6. Does not leave room for misinterpretations.
It a sales agreement an absolute must?
Yes, it is an absolute must. Most importantly, the contract ensures that the legal rights of both the seller and buyer are fully protected. Nobody wants any unexpected surprises or headaches down the road. As a general rule, it always best to err on the side of caution.