when a buyback takes place, it is because the seller has agreed in advance of a sale that he or she will repurchase an item of value from the buyer. the seller usually offers to repurchase an item to encourage the sale or to alleviate a buyer’s concerns. sell/buybacks and repurchase agreements function to serve as a means for the legal sale of collateral but act more like a secured loan or deposit. the main difference between the two is that the repurchase agreement is always in a written form of contract. because of a lack of documentation, the sale and repurchase are considered to be two separate contracts. in the event that one party defaults, it is less certain that there will be the responsibility of mutual obligations due to no documentation setting forth the terms and conditions.