Purchase Agreement — complete guide for buyers and sellers

A purchase agreement is a contract by which the seller transfers ownership of a thing to the buyer in exchange for an agreed price. It is one of the most widespread and oldest legal institutions — every day it is concluded in a million variants: from an online shop purchase to the sale of a production line between companies.

A purchase agreement is relevant not only for the purchase of physical goods, but also for the transfer of a business share, the sale of a receivable or a licence. The legal basis differs depending on who the parties to the transaction are and what the subject of the purchase is.

In Slovakia, purchase agreements are governed by two main statutes depending on the nature of the contracting parties:

Civil Code (Act No. 40/1964 Coll.), §§ 588–627 — applies to consumer contracts (B2C), i.e. where the buyer is an individual non-business person. It provides strong consumer protection: a 24-month statutory warranty, the right to return goods within 14 days in distance selling, and protection against unfair terms.

Commercial Code (Act No. 513/1991 Coll.), §§ 409–470 — applies to contracts between businesses (B2B). The parties have greater contractual freedom; the statutory warranty is 6 months but can be extended contractually.

Special rules apply to real property purchase agreements: Act No. 162/1995 Coll. on the Cadastre of Real Properties requires notarised signatures, registration in the land registry and a 30-day decision period for the cadastral authority. An electronic signature (without notarisation) is not sufficient to transfer real property ownership.

1. Purchase agreement for movable goods (B2C) — The most common type. Consumer protection: 24-month statutory warranty, right to make a claim, right to return goods in distance selling (14 days, no reason required).

2. Purchase agreement between businesses (B2B) — Greater contractual freedom. Statutory warranty only 6 months (but can be extended). Ability to agree retention of title (goods remain the seller's property until payment), payment terms and penalties.

3. Real property purchase agreement — Mandatory written form, notarised signatures, land registry registration. Electronic signature is not sufficient for the land registry. Typically handled through a notary or solicitor.

4. Share transfer agreement — Sale of a share in an s.r.o. (LLC). Mandatory form: notarial deed or agreement with officially certified signatures. Proper registration in the Commercial Register.

5. Receivable purchase agreement (assignment) — Assignment of a receivable under § 524 CC. Written form, notice to the debtor.

A B2B purchase agreement for movable goods should contain the following clauses:

Creating a purchase agreement for a B2B transaction:

1. Identify the legal basis — B2C or B2B? Consumer contracts impose more extensive obligations on the seller. For real property transfers, a notary is required.
2. Precisely describe the subject of the purchase — Product code, quantity, quality, technical parameters, condition (new/used). An attached specification is recommended.
3. Agree payment terms — Price in €, VAT, payment due date, method of payment (bank transfer, deposit). Late-payment penalty.
4. Address ownership transfer and risk — Retention of title, Incoterms for international trade, liability for damage during transport.
5. Sign electronically (for movable goods) — zipzipdoc enables fast electronic signing with an audit trail. For real property, a notarised signature is mandatory.

These mistakes recur in purchase agreements:

• Imprecise description of the subject of purchase — "Laptop" without model, serial number and condition leads to disputes. Solution: precise specification with an attachment where necessary.
• Missing retention of title (B2B) — Without a retention of title clause, ownership transfers immediately, even if the buyer has not paid. Solution: an explicit retention of title clause.
• Forgetting VAT — A price without explicit indication of whether it is inclusive or exclusive of VAT leads to misunderstandings. Solution: always state the price both exclusive and inclusive of VAT separately.
• Ignoring claims conditions — For B2C contracts, statutory deadlines and consumer rights apply regardless of what is in the contract. Circumventing consumer rights is invalid.
• Missing Incoterms for imports/exports — Who bears the risk? Who pays customs and freight? Without Incoterms, dispute resolution becomes complicated. Solution: choose an Incoterms 2020 clause (e.g. DAP, CIF).