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.

INVESTOPEDIA EXPLAINS '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. Assignable Contract

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

    A non-cancelable contract whereby the purchaser must make the ...
  5. Tender

    To invite bids for a project, or to accept a formal offer such ...
  6. Purchasing Power

    1. The value of a currency expressed in terms of the amount of ...
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 >>
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

    Understanding Implicit Costs

    An implicit cost is any cost associated with not taking a certain action.
  5. Economics

    What are Deliverables?

    Deliverables is a project management term describing an object or function that must be provided or completed by a certain due date.
  6. Economics

    What Does Capital Intensive Mean?

    Capital intensive refers to a business or industry that requires a substantial amount of money or financial resources to engage in its specific business.
  7. Taxes

    Understanding Write-Offs

    Write-off has different meanings depending on the context in which it is used, but generally refers to a reduction in value due to expense or loss.
  8. Economics

    How Does a Company Use Raw Materials?

    Raw materials are the basic components of a finished product.
  9. Investing Basics

    What is a Private Company?

    A private company is any corporation that does not have shares publicly traded in the equity markets.
  10. Economics

    What is an Original Equipment Manufacturer (OEM)?

    An OEM is a company whose products are used as components in another company's product.

You May Also Like

Hot Definitions
  1. Bund

    A bond issued by Germany's federal government, or the German word for "bond." Bunds are the German equivalent of U.S. Treasury ...
  2. European Central Bank - ECB

    The central bank responsible for the monetary system of the European Union (EU) and the euro currency. The bank was formed ...
  3. Quantitative Easing

    An unconventional monetary policy in which a central bank purchases private sector financial assets in order to lower interest ...
  4. Current Account Deficit

    A measurement of a country’s trade in which the value of goods and services it imports exceeds the value of goods and services ...
  5. International Monetary Fund - IMF

    An international organization created for the purpose of: 1. Promoting global monetary and exchange stability. 2. Facilitating ...
  6. Risk-Return Tradeoff

    The principle that potential return rises with an increase in risk. Low levels of uncertainty (low-risk) are associated with ...
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!