You Might Be Thinking…

“Why would I need a lawyer for something as ordinary as a purchase agreement? I can just download a free template online.”
But free templates are one of the most common sources of legal trouble. Every transaction is unique, and a generic template cannot capture the specifics of your situation.

Clients Often Ask Me…

• Does a purchase agreement always have to be in writing?

• When does ownership and the risk of damage transfer?

• How are hidden defects handled – with cars or real estate?

• What is a reservation of title, and why does it matter?

• Can the purchase price be agreed on later?

Purchase Agreement in a Nutshell

Under the Civil Code (§ 2079 et seq.), a purchase agreement is a contract in which the seller undertakes to hand over a thing to the buyer and enable him to acquire ownership, and the buyer undertakes to pay the purchase price.

Essential elements:

• identification of the parties,

• precise description of the subject of purchase,

• the price (or the method of determining it).

For movable assets, even an oral agreement may suffice. For real estate, a written agreement is required together with a filing to the Land Register.

Risks and Common Mistakes

• Unclear description of the subject – e.g. “selling a car” instead of specifying VIN.

• Missing price provision – without a price, the contract may be invalid.

• Real estate transfer without precise parcel specification – the Land Register will reject the filing.

• Omissions about defects – warranties, liability for hidden defects often lead to lawsuits.

• Signing a template – without tailoring it to your deal is like walking on thin ice.

Step-by-Step Process

1. Identify the parties – full name, date of birth / company ID, address.

2. Specify the item – VIN for a car, parcel numbers for a house, detailed description for movable property.

3. Agree on the price and payment method – cash, transfer, installments, deposit.

4. Define delivery and transfer of risk – when and how the item is handed over.

5. Address defects – warranty period, liability for hidden defects, right to withdraw.

6. Consider ancillary provisions – reservation of title, contractual penalties, withdrawal clauses.

7. For real estate – written form + filing with the Land Register + lawyer’s escrow.

Examples from Practice

• Car with hidden defect – the buyer paid, the engine broke. The template contract said nothing about warranty, the court case lasted 3 years.

• House purchase – wrong parcel number in the Land Register. The transaction had to be repeated, the buyer lost part of his savings.

• Price “by agreement” – the court declared the contract invalid because the price was not determined.

Why Be Careful with DIY Templates

You can find hundreds of offers online: “Purchase Agreement Template Free.” Sounds tempting, but they often contain outdated provisions, fail to cover specifics of your case, and for real estate may result in rejection by the Land Register. The worst part is the false sense of security – thinking everything is legally covered, when it is not.

Lawyer’s Recommendation

From my practice, I recommend:

• Never sign without review – even for simple movable assets.

• For real estate always use escrow – it protects both parties.

• Agree clearly on defects – it will save you from disputes.

Checklist Before Signing

✔ correct identification of parties
✔ precise specification of the item
✔ clearly agreed price
✔ provisions on defects
✔ legally required form

FAQ

Does every purchase agreement have to be in writing?
No, oral form may suffice for movables. Real estate always requires written form.

When does ownership transfer?
Usually upon delivery of the item. For real estate, only upon registration in the Land Register.

How are hidden defects handled?
The buyer may claim warranty, request a price reduction, or withdraw from the contract.

Is a notary necessary?
Not legally required. But for larger transactions, advisable – also for escrow.