Here`s how to determine what kind of market you`ll find yourself in and how to get the most out of it. A purchase contract is a contract for the sale of a property in the future. This agreement defines the conditions under which the property in question will be transferred. To complete the transaction, Larry drafts a purchase agreement defining the transaction, including the purchase price. He keeps the article on the property while Derrick makes monthly payments. Once Derrick has paid the amount stated in the agreement, Larry will transfer the item home to Derrick. According to the Law on transfer of ownership, a purchase contract, with or without possession, is not a transfer. Section 54 of the Transfer of Ownership Act states that the sale of a property may only be effected by means of a registered deed and that a purchase contract does not generate interest or costs on its property.