Purchase Agreement
A purchase agreement records a sale that is not instantaneous — where payment, delivery and transfer of title happen on different days, and something could go wrong in between. It answers who bears that risk.
Risk of loss is the clause nobody reads
Equipment is sold on Monday, paid for on Wednesday, collected on Friday. It is damaged on Thursday night. Who carries that loss? Most informal sales have never considered the question, and the answer under default rules may not be what either party assumed. One sentence naming the moment risk passes — on payment, on delivery, on collection — removes an argument that would otherwise be settled by whoever is more stubborn.
What the template covers
What exactly is being sold
Identification by make, model, serial number or specification. "The machine" is not a description that survives a dispute.
Price, payment terms and deposit
How much, when, in what instalments, and whether any deposit is refundable and under what conditions.
Delivery, title and risk
Where and when delivery occurs, when title passes, and when risk of loss passes. These three are separate events and need not coincide.
Warranties, or their exclusion
Whether the seller warrants condition or the goods are sold as is. An "as is" sale needs saying explicitly, because implied warranties otherwise apply by default.
The UCC and implied warranties
Sales of goods between parties in the United States are governed by Article 2 of the Uniform Commercial Code, adopted in every state, with Louisiana as the notable exception. Article 2 supplies terms the parties leave out — including risk of loss under UCC § 2-509 and the implied warranty of merchantability under UCC § 2-314, which applies automatically where the seller is a merchant in goods of that kind. That warranty can be disclaimed, but § 2-316 sets out how: the disclaimer must mention merchantability and, if written, must be conspicuous. A quietly buried "as is" may not do the work the seller expects. The Statute of Frauds provision at UCC § 2-201 requires a signed writing for sales of goods of $500 or more.
Damaged in the four days in between
A restaurant bought a used commercial oven, paid in full, and arranged collection the following week. Over the weekend a pipe burst in the seller's storage unit. Neither the invoice nor the messages said anything about when risk passed or when title transferred. Both parties had insurance, and both insurers took the position that the other side's policy responded. It was resolved, slowly, and the resolution cost more than the oven. The uncomfortable part is that neither party was careless by ordinary standards. They had agreed a price, exchanged money and set a date, which is what most equipment sales look like. What they had not done was answer a question that only becomes interesting once something has already gone wrong — and by then it is a negotiation between two people who each have a good reason to believe the loss belongs to the other.
Questions people ask about this
Does a purchase agreement have to be in writing?
Under UCC § 2-201 a contract for the sale of goods for $500 or more is generally not enforceable unless there is a signed writing sufficient to indicate a contract was made. Below that threshold an oral agreement can bind, but proving its terms is another matter.
What does "as is" actually do?
It disclaims implied warranties, but only if done properly. UCC § 2-316 requires that a disclaimer of merchantability mention merchantability and, in writing, be conspicuous. A disclaimer in small print among boilerplate may fail.
When does title pass?
Absent agreement, the UCC supplies default rules that turn on delivery. Because those defaults surprise people, naming the moment expressly is the simplest protection available.
Is this the right document for buying a business?
No. A business sale involves liabilities, employees, contracts and often stock rather than assets, and needs a purchase agreement drafted for that. A letter of intent is usually the right starting point.