What is a binding purchase contract?
A contract is an agreement to do or not to do a certain thing. Therefore, a purchase contract for a vehicle, vessel,or aircraft is an agreement to buy the vehicle, vessel,or aircraft. A binding purchase contract is an enforceable contract for purchase of a vehicle, vessel, or aircraft. To form a binding purchase contract, one required element is that all parties to the contract must agree to the same terms for the purchase of the vehicle, vessel, or aircraft. For example, an agreement to agree is not binding, because the parties have not agreed to one or more of the specific terms that can be enforced. Another required element of a binding purchase contract is that each of the parties must be obligated to fulfill his or her part of the contract. This means that if one of the parties promises to buy or sell only if he or she chooses, a contract is not binding. Back to Top or New Rules • If I am a California resident and the vehicle, vessel, or aircraft I purchase on or after October 2,
