Netherlands purchase agreement: usage and creation guide
We keep saying that an invoice is the most important document when it comes to accounting. It contains almost all the information needed for the correct report but it’s also rather simple to issue and complete a trade.
But there are cases when you require a document to be legally binding. Or, you need to put more details about the operation on paper. A Purchase Agreement meets these demands. In this article, we will take a look at this type of document and discuss why to use it and how to prepare it.
What is Purchase Agreement
A Purchase Agreement or a Sales and Purchase Agreement (SPA) is one from the standard document kit of an entrepreneur. Its younger brothers, invoice and purchase receipt, are commonly used for simple deals, while a Purchase Agreement is applied for deals that require stronger commitment.
First, it suggests negotiations between a seller and a buyer. As a seller, you usually prepare the draft of the Purchase Agreement and send it to the buyer. The buyer, in the contract to purchase receipt or invoice, does not just pay the document but sends it back proposing some additions or changes.
Secondly, a Purchase Agreement comprehensively covers all aspects of the sale. A detailed description of items, terms regarding the payment and the delivery, allowed revisions, and other legally required disclosures are shown in this document. It helps to avoid misunderstandings in terms and conditions.
Basic Purchase Agreement Template
Any Purchase Agreement should contain the following paragraphs:
purchase order number (the internal number you use thereafter in your contract management to link the covering document to the transaction);
detailed and complete seller and buyer information (company and a responsible person’s name, legal address, phone number, etc.)
a detailed description of the type of goods or services (including quantity and any quality specifications required);
type of sale;
pricing information;
payment terms and conditions (regarding how and when the transaction will be made, for example, the transaction means or a settlement date if other currencies or shares, or assets are involved);
delivery terms and conditions (regarding how, when, and where the goods or services will be delivered);
contact information for witnesses or consigners if applied;
signatures of both parties;
agreement date and other dates relating to the fulfillment of the contract;
statement on whether amendments or revisions to the agreement are allowed.
Reflecting the nature of the goods or services and the industry, you can add details to the Purchase Agreement, such as:
an amount that has to be paid as a down payment or money deposit;
warranties the seller makes regarding the quality of goods (apart from the statutory guarantee, you can provide a commercial guarantee in the form of a written or digital certificate (limited for b2b customers);
terms of supplying software and security updates
consequences of default by either party;
legally required disclosures on demand.
Use Cases of SPA in the Netherlands
Sales and Purchase Agreement comes from the real estate sector but now it’s used in a variety of business. The entire sectors which commonly use SPAs are, for example, telecommunications and advertising, though the latter calls it Advertising or Marketing Agreement.
Mergers and acquisitions are a common area of application of a Purchase Agreement too. Since anyone’s business is a complex purchase, parties make a SPA to put in written an examination of the financial and legal aspects of the company, figures check, and so on.
However, a Purchase Agreement may be helpful in any area of business. As regards physical goods, the reliable prerequisites are the purchase price higher than €500 or deferred delivery of the goods.
A deferred payment, payment means involving a stock exchange even by relatively small amounts of money also make a SPA a more appropriate choice than a simple purchase order or an invoice.
Who Prepares SPA Templates
As long as a Purchase Agreement suggests liability and an eye for detail, most entrepreneurs prefer it to be managed by professionals. Lawyers, company attorneys, and financial advisors may be involved on occasion in the preparation of this document.
But with Enty, you can do everything yourself! Our contact creation tool allows creating a purchase agreement with no legal skills at all. You just answer simple questions, we create the document, your counterparty, and you sign the document, done easy-peasy.
How do I make sure that the document is correct, you might ask. No worries, the template was created and checked by professional lawyer to make your life easier. And, yeah, the document is fully compliant with the Dutch Civil Code.
So if you are looking for an easy way to create, store, and manage your contract, then Enty is definitely your choice. Don’t hesitate, give it a try!
