Size or industry notwithstanding, a business sale is a significant undertaking – both financially and legally.
A business sale agreement is a legally binding document that stipulates how the transaction will be carried out. Basically, it defines the agreed elements of the transaction as well as other critical legal frameworks that are going to guide the sale process to its logical conclusion.
But why do you need a business sale contract in the first place?
Having a solid knowledge of the business sale process, as well as the components of the sale agreement, can help you safeguard your rights and interests and steer clear of potential pitfalls down the road. Among other purposes, a business sale agreement:
- Puts both parties on the same page as far as the contract terms are concerned
- Outlines restrictive clauses like non-disclosures and confidentiality and ensures that both parties play by the rules of engagement
- Key clauses to include in a business sale agreement
Every business sale process is unique. That said, here are important clauses that should feature in every sale agreement:
- The parties to the contract: It is important that the agreement clearly identifies the buyer and the seller (collectively known as parties to the contract). This is important for eliminating potential confusion that may arise as well as the possibility of either party running away from responsibility should something go wrong.
- The business on sale: The sale agreement should clearly identify the business on sale, its assets as well as liabilities.
- The sale terms: This clause indicates the sale amount as well as how and payments will be made. It should also indicate whether the business will be sold directly or through an agent.
Contracts rule the business world. Find out how a properly-written business sale agreement can safeguard your rights and interests.