What is the Purchase and Sale Agreement? Are the purchase and sale contract and promise the same thing? How to make a purchase and sale contract?
1. What is the Purchase and Sale Agreement?
2. What is mandatory in this contract?
3. How to make a Vehicle Purchase and Sale Agreement?
4. How to make a Land Purchase and Sale Agreement?
5. How to buy and sell a property?
6. How to buy and sell equipment?
7. What documents are necessary to carry out the purchase and sale?
8. Method of payment: in cash or in installments?
9. How to make a sales receipt?
10. How much does a Purchase and Sale Agreement at the Notary Public’s Office?
11. What if the Contract is Terminated?
You’ve probably worked hard to sell your property, your vehicle, your land, or the equipment you once used.
You did all the marketing work for months until you found the right buyer.
You advertised on specialized sales sites, put up posters and even shared photos of the good you want to sell among your friends and strangers on social media, all so that your product would have as much exposure as possible.
You took so much risk, right?
But all this work doesn’t mean much if you end the whole process with the signing of a contract all wrong and full of legal flaws.
All your hard work can be thrown away if the contract is legally invalid.
That’s why you need to have a contract that legally guarantees you the full validity of the purchase and sale process you are carrying out with the buyer.
See how you can have the contract fully updated and made by the renowned lawyers of the Local Registry.
But before we start, let’s see what this contract we’re talking about is.
1. What is the Purchase and Sale Agreement?
The purchase and sale contract is nothing more than a commitment drawn up between the seller and the buyer.
In this contract are registered the intention of the first to hand over ownership of a product or property to the second, who will give in exchange an amount corresponding to the value of the good you want to acquire.
You have noticed that this instrument is a very important document, so it is essential that the obligations of the buyer and seller are made clear.
For the document to have greater legal force, it must be registered at a notary’s office, where the signature of the contract will be recognized.
But some people confuse this contract with a very similar one. You’ve certainly heard about Promise to Buy and Sell property in Park View City Lahore, haven’t you?
The Promise of Purchase and Sale is treated in the law as a pre-contract that guarantees the buyer possession of the object being traded by the seller.
The difference is that the contract guarantees immediate possession, while the promise provides for a period until the good is delivered to the buyer.
Another big difference is that the Promise to Buy and Sell usually features the famous repentance clause.
This clause allows the parties to fail to fulfill any stipulated obligation without incurring penalties for doing so.
Given this information, we see that writing a contract is not easy. There are several free word or PDF templates on the internet to print, but using them may not be a good idea due to their lack of legal certainty.
2. What is mandatory in this contract?
There are some clauses that are essential to their presence in a draft contract.
Next, we will see what cannot be missing from the Purchase and Sale Agreement.
A – Party data
A basic piece of information that any contract must have is the identification of the parties.
Here, you can inform whether they are legal entities or individuals, full names, in addition to the number of their identification documents, such as RG and CPF for individuals and CNPJ for legal entities.
It must also include the forms that allow contacting them, indicating address with zip code, e-mail, telephone numbers.
If you are an individual, it is also important to mention your marital status at the time of the legal transaction.
When the parties are married, depending on the property regime, the spouse must sign the contract to validate the deal.
It comes as no surprise to you that one of the parties that carry out the deal may be a company.
If that’s the case, it can act either as a seller, in the case of a real estate agent, for example, or be the buyer, as a shoe company that buys a new store.
When this occurs, the information that must be included in this part of the contract is a little different, as listed below:
- National Register of Legal Entities (CNPJ)
- Legal Entity Address
- Registration with the State Board of Trade
- Partner data – such as CPF – telephone, e-mail, among others.
B – Data of the good under negotiation
Once you’ve identified the parts of the contract, it’s time to identify its object. What exactly will be hired?
Detail it exhaustively, describe the object, trying to convey exactly what you want to sell, including its defects, as honest negotiation does not open the door for further legal claims.
Briefly, the contracted object must be lawful (within the law), possible (it can be materialized), determined or determinable (specified).
It is worth inspecting the property beforehand and attaching the Inspection Report to the contract so that the buyer has access to an impartial third party’s assessment.
C – Amount to be paid
Now that you have identified the parts of the contract and the product you are going to sell, you need to describe the amounts, dates and payment methods.
This is perhaps the most important clause in the contract, as you only sell a product for a cash consideration, isn’t it?
Therefore, in this clause, the total price of the transaction will be determined. When it comes to a vehicle, it involves the face value of the product and insurance.
This part of the contract must also specify the deadlines for the buyer to settle the value of the good and the method of payment: cash, credit card, bank payment slip or electronic transfer (the famous debit account).
D – Moment of possession
From what you’ve seen so far, writing a contract is really tiring because of its numerous details, but wait because it’s not over, I’ll explain to you what the time of inauguration is.
This clause is the most expected by the buyer of a property, as it will describe the moment when the buyer will take possession of the property: will it be after the down payment? After full payment of the payment?
The moment of possession can also occur after signing the contract, on a specific date stipulated by the parties or after the property has been paid off.
The important thing is that the parties establish a written agreement in the contract.
3. How to make a Vehicle Purchase and Sale Agreement?
You have already purchased a vehicle and know that it is a high-value asset, so when selling your car or motorcycle, you know the importance of drawing up a contract to formalize the transfer procedure.
Team of Taj Residencia already seen what a general contract needs to have, however, since we’re talking about a vehicle, like a car, you’ll agree with me that what’s going to be different here is the description of the good, right?
See our article on Vehicle Purchase and Sale Agreement and understand more about this legal business.
Many people feel insecure about writing a contract and seek the help of a lawyer. What may surprise you is the amount that law firms charge to write this document.
Purchase and Sale Agreement
4. How to make a Land Purchase and Sale Agreement?
If you’ve read this article so far, you may be thinking: if a vehicle is a high-value asset, can you imagine a piece of land?
Usually, those who sell rural or urban land are in need of money and the size of the negotiation requires a contract that is legally correct and corresponds to the property’s value.
We have listed the main clauses of the contracts above, such as: party data, object data, amount to be paid, time of ownership. However, what differentiates one contract from another is the object in question, which in this case will be the land.
If you want to know more about this contract and what should be included in the land description, see our article on Land Buying and selling here.
5. How to buy and sell a property?
It’s quite possible that you’ve been reading this far and wondering: but isn’t the land a property? What would be the difference between a land purchase and sale agreement and a property purchase and sale agreement?
The land is a property without improvements, there is no construction on top of it, while a property is a category that includes, in addition to the land, houses, apartments, commercial buildings, among others.
We’ve already seen what a general contract needs to have, but in case you want to know what differentiates the general contract from the purchase and sale of property.
6. How to buy and sell equipment?
When you make a living as an entrepreneur, it is common for you to sell a large amount of equipment, often of great economic value.
At these times, although it is not mandatory, it is good to think about using a contract to make the sale of equipment safer.
Therefore, if you want to see the details of how this document is made, see our article on the Equipment Purchase and Sale Agreement.
7. What documents are necessary to carry out the purchase and sale?
In general terms, the contracts set out in detail the commitments made by the seller and the buyer regarding the good that is being negotiated. Below, we will present a list of documents that must be submitted by the parties for the sale to take place.
When the seller or buyer is an individual:
- proof of address;
- identity document (RG or driver’s license);
- CPF;
- birth or marriage certificate , if applicable;
- if married, must also present the spouse’s documentation;
- protest of titles;
- clearance certificate of civil actions;
When the seller or buyer is a legal entity:
- protest of titles ;
- clearance certificates of civil actions and state debts and with the INSS;
- document with the date of the most recent modification of the contract;
- social contract or social status of the company.
8. Method of payment: in cash or in installments?
The success of a business lies in defining the form of payment. Thus, understanding how payment in cash and in installments works is essential.
Paying in cash is the simplest way to pay for whatever business you are doing. Usually, those who pay in cash always receive a discount and the discount is even greater when the payment is made in cash.
But imagine that the business we are talking about is the sale of a property?
Most people choose to buy properties through Tajarat Properties, where initially a simulation is made to find out how much the finance company can release to the buyer as credit and what the value of each installment will be, already debiting the possible down payment that the buyer will pay…
Then comes the credit analysis stage: at this stage of the process, the income of those who will buy the property and the credit situation in the market will be analyzed.
There are also those who prefer to pay in installments without including the financial. In these cases, it is extremely important that the form of payment in installments is well described in the contract, including mentioning the value of the installments and due date.
It is also essential to mention where the payment will be made, whether it will be delivered by hand to the seller (tell where the delivery will be) or by deposit or bank transfer (do not forget the account details for deposit)
You realized that choosing the payment method is very important to continue the business, right?
However, there is no point in doing this step well in a contract that is full of legal errors that could harm you in the future.
So, look for a team of professionals who can really help you write a good contract, such as a lawyer or notary.
9. How to make a sales receipt?
A receipt is a document by which a person declares that he has received a value from another.
It is recommended that whenever you negotiate something, make a receipt and collect the signature of the person who gave you the money.
You might think: well, I can use the pre-made templates that exist in stationery stores, but in practice, making a receipt is not that difficult.
Therefore, before making a Purchase and Sale Receipt, look for a qualified professional.
10. How much does a Purchase and Sale Agreement at the Notary Public’s Office?
Now that you have learned how to make the document that proves the purchase and sale of a good and know everything that it must contain, you may be judging yourself incapable of writing this instrument.
Given this, a good option is to pay someone with more legal knowledge to write it for you.
A lawyer is a person who is fully qualified to do it correctly.
However, some private lawyers and law firms charge at least R$110 to write a simple contract, an amount that can increase depending on the difficulties in the negotiation process.
With this, a good solution has been the websites of online notary offices that, in addition to offering a simple and safe form of filling out, perform this type of service for a much more affordable price.
11. What if the Contract is terminated?
Imagine that the buyer made the legal deal with you, but a few months later, he lost his job and finds it difficult to pay the installment of the property.
It is then that one of the most boring moments of the contractual relationship arises, the breach of the contract, that is, its dissolution, where one of the parties must return all the values of the negotiation.
When the cancellation of the contract is caused by the seller/builder, the Consumer Code states that the paid installments must be immediately refunded.
In any case, the property purchase and sale contract usually includes in its termination clause a fine of 10% on the amount paid as a penalty.
This means that the buyer who does not pay on time must pay a 10% fine calculated on the total value of the deal, when the delay is for more than 3 months and the buyer, even after notification, does not regularize the payment .
ALL ABOUT THE TOPIC
Legislation: Brazilian Civil Code (Law No. 10.406/02)
Concept: agreement between two or more parties whose purpose is to acquire, safeguard, transfer, modify or terminate an equity business.
What can’t be missed?
- Party data
- Data on the good that is being traded
- Good value
- Payment conditions
- time of possession
- Transfer of ownership of the object: registration of the contract at the notary’s office
Other names for this document
- Real estate purchase and sale agreement
- Real estate purchase and sale agreement
- Property Purchase Agreement
- Property Sale Agreement
