How to Increase Your Rights in a Purchasing AgreementBuyers' Training
April 17, 2013 — 1,083 views
The most important part of buying or selling an asset or property is making up the purchasing agreement. This agreement or contract is the biggest link that holds together the sales and purchase of the commodity. Each item in the contract and the specific intent should be mentioned clearly without any disparity. Purchasing professionals who work with the buyer and seller should take care while coming up with the agreement. The following are some tips which will help purchasing professionals devise the contract rights in such a manner, so as to secure appropriate rights and limit the rights of the seller.
Make a Hire Purchase Agreement
In order to make the purchase transaction a smooth one, as a buyer, you can devise the terms of the contract in such a way that it is a hire purchase agreement. In such an agreement, the buyer needn’t pay the entire amount of the purchase all at once. Instead, the purchase can be made as a deferred payment plan or as installments. If you opt for installments, then the property will come under the buyer only when the entire sum is paid. But if you go in for the former option, the property immediately belongs to the buyer once he starts making his payment. This also gives the buyer the right to sell the property and to allow the new purchaser the immediate possession of the property.
To secure more rights over the property as a buyer, it is advised that you make a hire purchase agreement which has an option of deferred payment. This agreement allows the buyer to buy an item of choice, over a long period of time. But the buyer will lose his right to the property if he fails to live up to the terms of the agreement.
Changes to the Property
A purchase agreement should also specify the obvious implications that can happen if any changes are made to the property. If the seller makes any changes to the property like signing a new lease of a commercial property, then the buyer has the full right to terminate the contract rights. If the seller fails to do the repairs and renovations of the property in the specified time, then also the buyer can step back from the contract without having to face any legal implications.
The purchase agreement should also give the buyer enough rights to cancel the purchase of the property made. This can be done by introducing the inspection contingency clause in the purchase agreement. As per this clause, the buyers can request for a period of time to inspect the prospective property. If the buyer is dissatisfied with the condition of the property, then as per the clause, he/she can cancel the contract and receive the return of the deposit made.
A purchase contract should also contain a provision of financing contingency. As per this clause, the buyers will have the full right to cancel the purchase contract rights in case he does not get approval of the loan to buy the property in time.