Sales And Purchase Agreement (SPA)

What is a ‘Sales And Purchase Agreement – SPA’

A sales and purchase agreement (SPA) is a legal contract that obligates a buyer to buy and a seller to sell a product or service. SPAs are found in all types of businesses but are most often associated with real estate deals as a way of finalizing the interests of both parties before closing the deal.

Explaining ‘Sales And Purchase Agreement – SPA’

Sales and purchase agreements are also found in the upper supply chains of many large, publicly traded companies. They are set up to help suppliers and purchasers forecast demand and costs, and become increasingly important as the size of the deals increases.

Examples of Sales and Purchase Agreements in the Marketplace

One of the most common SPAs occurs during real estate transactions. As part of the negotiation process, a final sales price is agreed upon by both parties. Additionally, other items relevant to the transaction, such as a closing date or contingencies, are also included.

Further Reading

  • Standardisation of legal documentation in Islamic home financing in Malaysia – [PDF]
  • Conventional Home Loan and Islamic Home Financing in Comparative Perspective – [PDF]
  • Buy‐outs in Hungary, Poland and Russia: governance and finance issues – [PDF]
  • The petroleum resource rent tax (PRRT) and the economics of an oil and gas project – [PDF]
  • The role of financial economics in securities fraud cases: Applications at the Securities and Exchange Commission – [PDF]
  • Legal Issues in Sharīʿah-compliant Home Financing in Malaysia: A Case Study of a Bai Bithaman Ājil Contract – [PDF]