Counterpurchase

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.

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