Simple Purchase Agreement Template for England and Wales

A purchase agreement records the terms on which a buyer agrees to buy goods or assets from a seller. It's useful whenever the transaction is significant enough that a written record of price, delivery, specification, and warranties is worthwhile. For high-value or complex goods, a purchase agreement reduces the risk of disputes about what was agreed.

The Sale of Goods Act 1979 implies terms that goods must be of satisfactory quality (meeting the standard a reasonable person would regard as satisfactory), fit for any purpose communicated to the seller, and match their description. These implied terms apply unless expressly and reasonably excluded by the contract.

Under the Sale of Goods Act 1979, title passes when the parties intend it to. For specific goods in a deliverable state, intention is presumed on contract formation unless the agreement provides otherwise. Sellers often use retention of title (Romalpa) clauses to keep ownership until full payment is received, protecting themselves if the buyer becomes insolvent.

A retention of title (ROT) clause states that the seller retains ownership of goods until paid in full. It's particularly important where credit terms are given. If the buyer enters insolvency before paying, an ROT clause allows the seller to reclaim the goods rather than joining as an unsecured creditor. The clause must be clearly drafted and incorporated into the contract before delivery.

The buyer's remedies depend on the nature of the contract. In a business-to-consumer sale, the Consumer Rights Act 2015 gives the consumer the right to reject within 30 days, request repair or replacement, or claim a price reduction. In business-to-business sales, the Sale of Goods Act 1979 applies, with the buyer's right to reject depending on whether the breach goes to the root of the contract.

In business-to-business contracts, exclusion clauses are subject to the Unfair Contract Terms Act 1977 reasonableness test. An attempt to exclude liability for breach of the satisfactory quality implied term is unlikely to be reasonable in most standard supply situations. In consumer contracts, such exclusion clauses are void under the Consumer Rights Act 2015.

The agreement should specify the delivery date or lead time, the delivery location, and who bears the cost of delivery. Risk of loss or damage typically passes on delivery unless otherwise agreed. For goods in transit, confirm whether the seller or buyer is responsible for insuring the goods during carriage.

Payment in advance, on delivery, or on 30-day credit terms is common. For business-to-business transactions, the Late Payment of Commercial Debts (Interest) Act 1998 allows statutory interest on overdue invoices. Specify clearly when payment falls due, what constitutes default, and whether interest will be charged on late payment.