Counterpurchase

AAA

DEFINITION of 'Counterpurchase'

An exchange of goods between two parties that, by means of two contracts, agree to act as purchaser and supplier to each other and to purchase all goods in cash.

BREAKING DOWN 'Counterpurchase'

The first contract is the original sales contract, outlining the terms in which an initial buyer purchases from an initial seller. The second contract, a parallel contract, outlines the terms in which the original seller agrees to buy unrelated goods from the original buyer. Basically this is a contractually enforced relationship between two parties who agree, at some point, to provide business for one another.

RELATED TERMS
  1. Onerous Contract

    A type of contract where the costs involved with fulfilling the ...
  2. Countertrade

    International trade in which goods are exchanged for other goods, ...
  3. Tender

    To invite bids for a project, or to accept a formal offer such ...
  4. Assignable Contract

    A futures contract with a provision permitting the contract holder ...
  5. Hell or High Water Contract

    A non-cancelable contract whereby the purchaser must make the ...
  6. Purchasing Power

    1. The value of a currency expressed in terms of the amount of ...
Related Articles
  1. Brokers

    Deal Effectively With Difficult Clients

    Learn how to tame the most shrewish clients with these simple methods.
  2. Personal Finance

    Master The Art Of Negotiation

    Learn the strategies that will help you to come out on top in any negotiation.
  3. Options & Futures

    Moral Hazards: A Bump In The Contract Road

    Learn how this phenomenon can cause a party in an agreement to behave differently than expected.
  4. Economics

    Explaining Replacement Cost

    The replacement cost is the cost you’d have to pay to replace an asset with a similar asset at the present time and value.
  5. Term

    What are Articles of Association?

    Articles of association are a document that specifies the regulations for a company’s operations.
  6. Investing Basics

    What Does Window Dressing Mean?

    Window dressing is the actions taken close to the end of a reporting period by managers to try and make their financial numbers look better.
  7. Economics

    What Does Business-to-Business Mean?

    The term business-to-business refers to transactions or communication that takes place between two or more businesses.
  8. Economics

    What are Barriers to Entry?

    A barrier to entry is any obstacle that restricts or impedes a company’s efforts to enter an industry.
  9. Economics

    Understanding Management by Objectives

    Management by objectives is a process in which a manager and an employee agree on specific performance goals and then develop a plan to reach those goals.
  10. Economics

    What Does Going Concern Mean?

    Going concern is a concept used in business and accounting to describe the fiscal health of a company.
RELATED FAQS
  1. How can I calculate funds from operation in Excel?

    In general, the terms "work in progress" and "work in process" are used interchangeably to refer to products midway through ... Read Full Answer >>
  2. When does Q4 start and finish?

    Most companies such as Facebook have financial years that end on December 31st. For these companies, the fourth quarter begins ... Read Full Answer >>
  3. When is it useful to look at a company's fixed asset turnover ratio?

    It is useful to look at a company's fixed asset turnover ratio when an outside observer, such as an investor, wants to know ... Read Full Answer >>
  4. What is the difference between perfect and imperfect competition?

    Perfect competition is a microeconomics concept that describes a market structure controlled entirely by market forces. In ... Read Full Answer >>
  5. How difficult is it to understand business analytics?

    In the abstract, business analytics is the study of financial, economic, consumer and production data through statistical ... Read Full Answer >>
  6. At what levels are core competencies required for businesses operating in the primary ...

    Core competencies help businesses understand their best abilities to perform in the market. Primary sector businesses mine ... Read Full Answer >>

You May Also Like

Hot Definitions
  1. Bear Market

    A market condition in which the prices of securities are falling, and widespread pessimism causes the negative sentiment ...
  2. Alligator Spread

    An unprofitable spread that occurs as a result of large commissions charged on the transaction, regardless of favorable market ...
  3. Tiger Cub Economies

    The four Southeast Asian economies of Indonesia, Malaysia, the Philippines and Thailand. Tiger cub economy indicates that ...
  4. Gorilla

    A company that dominates an industry without having a complete monopoly. A gorilla firm has large control of the pricing ...
  5. Elephants

    Slang for large institutions that have the funds to make high volumes trades. Due to the large volumes of stock that elephants ...
  6. Widow's Exemption

    In general terms, a widow's exemption refers to the amount that can be deducted from taxable income by a widow, thereby reducing ...
Trading Center
×

You are using adblocking software

Want access to all of Investopedia? Add us to your “whitelist”
so you'll never miss a feature!