A stock buyback agreement is a legal contract between a company and its shareholders that details how the company will repurchase outstanding stocks on a given date and at specific terms. The agreement outlines the expectations of both parties and makes clear how the transaction will be conducted—including how funds will be transferred, when the repurchasing process will take place and what happens if the stock cannot be bought back at the agreed upon price. By enabling a company to buy back its own shares, these agreements provide an important tool for returning value to investors, controlling the capital structure of a company and boosting shareholder confidence.