What does a purchase contract cost? If you are planning to conduct a transaction that involves a buyer and a seller, you may want to know how much a purchase contract will cost.
Let’s explore this question and review some general information about purchase contracts and why you should always have one.
How Much Does a Purchase Contract Cost?
Purchase contracts can most commonly be found in real estate transactions. Still, they are often used for smaller transactions as well. Typically, a purchase contract is recommended for any transaction over $500.
The purpose of a purchase contract is to protect both parties throughout the contract and exchange of property. The contract accomplishes this by describing the item condition, price, and terms and conditions surrounding the sale and transfer of property.
Purchase contracts can be complicated, especially in real estate and other significant transactions. As a result, many parties hire an attorney to assist with drafting and reviewing a purchase contract.
A contract lawyer will know what terms and conditions to include in your purchase contract to protect both parties and make the agreement legally binding. However, if the contract is poorly written or doesn’t contain all the necessary terms, you could suffer financial consequences.
Based on ContractsCounsel’s marketplace data, the average cost of a project involving a purchase contract is $863.33.
What’s Included in a Purchase Contract
The terms and conditions included in a purchase contract will vary based on the item sold, the service provided, and the needs of both parties.
Despite the variations that you may find in purchase contracts, a basic purchase agreement should include the following clauses:
- Party information. The names, business names, and contact information of all parties involved in the transaction.
- Sale inclusions and exclusions. Information about the items involved in the transaction, including a detailed description of things. Suppose the sale involves real estate. All inspection requirements, appraisals, financing, and titling information should be included.
- Disclosures. Any information about the item being sold that could impact the value.
- Payment and pricing. How much does the item cost, and what are the terms and conditions surrounding the payment, including all payment options (cash, credit card, loan, etc.) and dates payment is due.
- Delivery of goods. The details surrounding how certain items like a car or furniture will be delivered to the buyer. Specific details like delivery cost, time, place, and liability for damages should all be addressed.
- Warranties. Warranties are guarantees that a seller makes a buyer that the item being purchased meets the expected level of reliability. This legally enforceable guarantee can be made as an express or implied warranty. An express warranty is an affirmative statement about the quality of the goods. For example, “the car starts and runs without any issues.” An implied warranty is an unwritten guarantee, like the assumption that the car you are about to buy will work properly. Either warranty can be written or oral, but it is always better to have the warranty written into the contract.
- Signatures. Both the buyer and the seller need to sign the purchase agreement.
Why Do I Need a Purchase Contract?
Purchase contracts are necessary legal contracts, whether your transaction is large or small. This agreement protects the seller by requiring the buyer to agree to purchase an item for a set price under specific terms and conditions.
The buyer is protected because the purchase contract serves as a receipt for the transaction proving they rightfully own the property detailed in the agreement and providing remedies if the item is not true to its description provided by the seller.
A correctly written purchase contract will be legally enforceable in court. However, suppose either party fails to uphold their end of the contract terms. In that case, the injured party can seek legal relief through a lawsuit for breach of contract.
Purchase Contract Projects
Purchase Contract Drafting
Purchase contracts are important documents because they lay out the terms and conditions surrounding a sale or transaction between a buyer and a seller. Without a valid purchase contract, both parties risk financial damages if either party misrepresents an item or fails to uphold their end of the deal.
It is common for individuals or companies selling goods or providing a service to hire a lawyer to draft a valid purchase contract.
An experienced attorney will know the contract laws in your state and be able to create a document customized to your needs that protects both you and the other party in the transaction.
Purchase Contract Review
In most cases, the seller or service provider drafts and provides the purchase contract for a transaction. If you have been asked to sign a purchase contract, it is crucial that you understand what you agree to and what obligations you must fulfill. Before signing a purchase contract, it is recommended that you have it reviewed by your attorney.
A contract lawyer can review your purchase contract's terms and ensure that it is fair and legally enforceable. In addition, your lawyer will be able to explain the contract to you, so you are fully aware of all your obligations.
Purchase Contract Drafting Cost
You will incur legal fees if you hire a lawyer to draft a purchase contract. A lawyer will charge for the time it takes to draft the document and may include additional fees for consultations and communication.
ContractsCounsel’s marketplace data shows that purchase contract drafting costs $1,051.25 across all states and industries.
Purchase Contract Review Cost
If you choose to draft your purchase contract, or you must sign a purchase contract that has been drafted by someone else, you can hire a lawyer to review the contract. A lawyer will charge for their time reviewing the agreement, but the fees are typically less than drafting fees.
ContractsCounsel’s marketplace data shows that the average purchase contract review costs $600.00 across all states and industries.
How Do Lawyers Charge for Purchase Contracts?
Hourly Rates for Purchase Contracts
Hourly rate fee structures are one of the most common ways for lawyers to bill clients. Under an hourly rate, the lawyer will keep track of their time working on the project and then bill the client for the total number of hours.
This fee structure ensures that the lawyer is paid for their time even if the case takes longer than expected.
ContractsCounsel’s marketplace data shows that the average hourly rate for a purchase contract lawyer ranges from $200 - $350 per hour.
Flat Fee Rates for Purchase Contracts
Flat fee rate structures are becoming more common for a lawyer to use when hired for a specific project, like drafting or reviewing purchase contracts. Under this fee agreement, the attorney provides their client a flat fee quote for all legal services involved in the particular task.
The client must usually pay this fee upfront and will not incur additional fees. The client must understand what services are included in the flat fee rate. Additional projects, tasks, or meetings could incur more legal fees.
ContractsCounsel’s marketplace data shows that the average flat fee rate for a purchase contract is $863.33.
Get Help with Purchase Contracts
Do you need help with a purchase contract project? If so, post a project in ContractsCounsel’s marketplace to receive flat fee bids from contract lawyers to handle your project. All lawyers on the ContractsCounsel’s platform are vetted by our team to make sure you are provided with top tier service.