Purchase Agreement Definition

A purchase agreement is a legal agreement regarding the purchase of property-usually real estate-including terms and price. In some jurisdictions a purchase agreement is equivalent to a contract but in other jurisdictions they are separate documents. The purchase agreement is used to establish terms and conditions which are ultimately formalized in a purchase contract. In some cases a purchase agreement is executed to establish a long-term or repetitive purchasing process, such as when an employee enters into an employee stock purchase plan.