Purchase agreements are complex documents that stand at the center of a transaction. These extensive documents lay out all the details and particulars of the sale. While a purchase agreement can be quite lengthy alone, they are supported by additional agreements, exhibits, and schedules. Even in small transactions purchase price, payment terms, what is being acquired, representations and warranties of the seller, representations, and warranties of the buyer, dispute resolution terms, and more are packed into one document that is supplemented by other agreements such as a lease, a non-competition agreement, a consulting agreement, an assignment and assumption agreement and more.
Every purchase agreement is unique to each transaction. There are even two different types of transactions that are common in business deals. Generally, there is either a stock sale or an asset sale. Whichever type of deal you and the other party agree to can greatly impact the contents of the purchase agreement.
The terms in the purchase agreement are binding and often replace any previous agreements between the parties. It is very important that these agreements are well-drafted because there are plenty of potential mistakes to be made in any number of areas. These mistakes can become huge issues after you believe the deal to be done.