repurchase

Contractual TerminologyLegal glossary term

Legal Definition

In a legal context, 'repurchase' refers to the act of buying back or acquiring ownership of a previously sold asset, often involving a contract to buy it from the original seller. It establishes a new contractual relationship where one party agrees to purchase the asset from another party, typically under specific terms.

Plain-English Translation

Imagine you bought something, and then later someone else agreed to buy that same thing back. 'Repurchase' is the legal term for this agreement: it means agreeing to buy an item again, often with a price set by the original deal.

Context in Contracts

It matters because it defines the legal mechanism for transferring ownership after an initial sale, ensuring that the buyer has the right to acquire the asset under specific conditions set forth in the agreement.

Visual model

Understand repurchase fast

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01

A contract where the original seller agrees to repurchase the goods from the initial buyer.

02

A legal clause detailing the terms under which a party must buy back an asset sold previously.

Document context

How repurchase shows up in legal documents

What is it?

A contractual obligation or agreement where one party agrees to buy back a property, asset, or contract from the original seller, often involving a new purchase price and terms.

Why does it matter?

It matters because it defines the legal mechanism for transferring ownership after an initial sale, ensuring that the buyer has the right to acquire the asset under specific conditions set forth in the agreement.

When does it matter?

When a contract specifies that one party will buy back the property or asset from the original seller, often detailing the terms of the repurchase price and the conditions under which the original transaction is finalized.

Where is it usually seen?

In contracts related to asset sales, real estate transactions, or agreements where an original buyer agrees to purchase the asset from the initial seller.

Who is affected?

The original seller (the party who sold the item) and the repurchasing party (the party who buys it back) are affected by this term.

How does it work?

It works by establishing a legal obligation for the buyer to acquire the asset, often with specific terms regarding the price paid, ensuring the transaction is legally valid.

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Wikipedia

Repurchase agreement

A repurchase agreement, also known as a repo, RP, or sale and repurchase agreement, is a form of secured short-term borrowing, usually, though not always, using government securities as collateral. A contracting party sells a security to a lender and, by...

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Disclaimer: We do not provide legal advice. We translate legal language into plain English and help you prepare for a conversation with a lawyer.