Should You Use the AIR Purchase And Sale Agreement?

Generally, yes. The AIR purchase and sale agreement form is well-drafted and does not substantially favor either the buyer or the seller. As a result, it is frequently used for the purchase of real estate in California.

There are many advantages to using the AIR purchase and sale agreement. Brokers, lawyers, buyers, and sellers are familiar with the form. It is therefore much easier for all parties involved to read through the contract and understand the terms to which each party is agreeing.

If lawyers are hired to represent the parties, less time is required for the parties to revise and negotiate the terms of the purchase agreement.  This frequently results in opening escrow quicker, and less attorneys’ fees negotiating the purchase and sale agreement.

Some attorneys for sellers prefer not to use the AIR purchase and sale agreement because they contend it does not have the protections for sellers that are often found in custom purchase agreements. Here are three examples of reasons why some sellers’ counsel contend the AIR purchase and sale agreement is too friendly to buyers:

  1. It does not contain a broad release by buyer of claims against seller.
  2. It does not have a “cap” on the maximum amount Buyer can sue Seller for after the closing (for breaches of warranties, etc.).
  3. It contains too many Seller representations and warranties as compared to a typical custom agreement.

Although the AIR purchase and sale agreement does not contain certain provisions that provide additional protection to sellers, these provisions can be added in an addendum.

If the seller’s primary concern is obtaining a final purchase agreement that is more favorable to seller, and the seller is willing to endure an additional round or two of negotiations and some additional attorneys’ fees to achieve that objective, a custom form may be more appropriate.

In a subsequent article, I will suggest areas of the AIR purchase and sale agreement that sellers may wish to revise.

Do you use the AIR purchase and sale agreement? Which provisions do you modify? Post your comments or questions below.

By | 2018-01-31T21:13:56+00:00 May 28th, 2015|Purchases/Sales|6 Comments


  1. Marty Morici May 28, 2015 at 10:47 am - Reply

    Great comments

    • Usman Mohammed May 28, 2015 at 11:24 am - Reply

      Thanks Marty! As I noted, I will post an article with possible changes that Sellers can make to the AIR contract – probably in a week or two.

  2. Anonymous June 3, 2015 at 10:17 am - Reply

    What’s your tip for number 3?

    • Usman Mohammed June 3, 2015 at 1:29 pm - Reply

      There are a variety of ways to address number 3 – the view by some Sellers that the AIR purchase agreement contains too many Seller representations/warranties. Here are some ways to address the concern:

      1. Seller can reduce the number of reps it is making.
      2. Seller can qualify some of the reps to Seller’s current, actual knowledge (without any duty of inquiry or investigation).
      3. Seller can reduce the period of time the reps/warranties survive.
      4. Seller can add a cap on the maximum Buyer can obtain from Seller in the event that a rep/warranty is not accurate.

      There are other ways as well. Today, I posted Part 1 of an article on Modifications to the AIR Purchase Agreement ( In Part 2, I will focus on Seller representations and warranties. Part 2 will be posted in the next couple of weeks.

      Thank you for your question. If you would like more specifics, feel free to e-mail me at

  3. Anonymous June 9, 2015 at 9:31 pm - Reply

    One issue I can’t resolve is BO. I am involving in a transaction, a hotel, which is including BO, I just don’t know how AIR contract can help me on that.

    • Usman Mohammed June 13, 2015 at 5:05 pm - Reply

      I do not fully understand your question. Can you explain it in more detail and tell me what BO stands for? If you wish, you can e-mail me at

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