A purchase agreement is a legally binding contract between a buyer and a seller, outlining the terms and conditions of a sale. Including a deposit in the agreement helps to secure the buyer’s commitment to the purchase while providing the seller with assurance. Below are three practical examples of purchase agreements with deposits, each tailored to different contexts.
In the real estate market, a purchase agreement typically includes a deposit to demonstrate the buyer’s serious intent. This example illustrates a standard residential property purchase agreement.
A couple, John and Lisa, have decided to purchase a home from a seller, Mr. Smith. To secure their offer, they provide a deposit.
Example:
PURCHASE AGREEMENT
This Purchase Agreement (“Agreement”) is made on [Date] between John Doe and Lisa Doe (“Buyers”) and Mr. Smith (“Seller”). The Buyers agree to purchase the property located at [Property Address] for the total purchase price of $300,000.
The Buyers shall provide a deposit of $15,000, which represents 5% of the purchase price. This deposit shall be held in escrow by [Escrow Company Name] and shall be applied toward the purchase price at closing.
The closing date shall occur on or before [Closing Date]. In the event the Buyers fail to perform their obligations under this Agreement, the Seller shall have the right to retain the deposit as liquidated damages.
Notes:
When purchasing expensive equipment, businesses often require a purchase agreement with a deposit to ensure both parties are committed to the transaction. This example is designed for a small business purchasing machinery.
A small bakery, Sweet Treats, is buying a commercial oven from a supplier, Baker’s Equipment Co., and agrees to a deposit to secure the transaction.
Example:
PURCHASE AGREEMENT
This Purchase Agreement (“Agreement”) is made on [Date] between Sweet Treats, Inc. (“Buyer”) and Baker’s Equipment Co. (“Seller”). The Buyer agrees to purchase one commercial oven model [Model Number] for the total purchase price of $25,000.
The Buyer shall provide a deposit of $5,000, due upon signing this Agreement. This deposit shall be non-refundable unless the Seller fails to deliver the oven by the agreed-upon delivery date of [Delivery Date]. The balance of $20,000 is due upon delivery.
Should the Buyer cancel this Agreement after the deposit is made, the Seller has the right to retain the deposit as compensation for lost opportunity.
Notes:
For buying vehicles, a deposit is often required to hold the vehicle until the final transaction is completed. Here’s a practical example of an individual purchasing a car.
Maria is buying a used car from a dealership and agrees to a deposit to secure the purchase until financing is arranged.
Example:
PURCHASE AGREEMENT
This Purchase Agreement (“Agreement”) is made on [Date] between Maria Garcia (“Buyer”) and [Dealership Name] (“Seller”). The Buyer agrees to purchase a used [Make and Model of Vehicle], VIN [Vehicle Identification Number], for the total price of $18,000.
The Buyer shall pay a deposit of $1,000 to the Seller upon signing this Agreement, which will hold the vehicle for a period of 14 days while the Buyer secures financing. If the Buyer fails to secure financing within this timeframe, the deposit shall be forfeited.
If the sale is completed, the deposit will be applied to the total purchase price, with the balance due at the time of delivery.
Notes: