Business Sale Agreements
When you are selling a business, a well drafted business sale agreement will:
- be in plain language;
- clearly identify the assets to be sold;
- set out the commercial terms between the parties;
- not contain terms that are unfair or unconscionable.
What is a Business Sale Agreement?
📜A business sale agreement is a legally binding contract that outlines the terms and conditions under which a business is sold from one party to another.
A business sale agreement includes critical details such as the purchase price, the assets and liabilities being transferred, the timeline for the sale, and any contingencies or conditions that must be met before the transaction can be finalised. It also specifies the responsibilities of both the buyer (purchaser) and the seller (vendor), ensuring that both parties are clear on their obligations and rights throughout the business sale process.
By formalising these terms, a business sale agreement provides legal protection, minimises misunderstandings, and helps facilitate a smooth transition of ownership, helping to safeguard the interests of both parties involved in the transaction.
What terms are usually in a Business Sale Agreement?
A business sale agreement will contain information about the vendor and the purchaser and information about the business, including the type of business being operated and the location of the business.
📑A business sale agreement will also set out other terms such as:
- the purchase price and method of payment;
- details of the assets of the business that are being sold;
- the date for completion;
- the obligations of the parties before completion of the sale of the business;
- conditions precedent (any conditions which must be met for the sale to proceed);
- restraint clauses, such as a confidentiality clause and a non-competition clause (preventing the vendor from competing with the business for a defined period); and
- a statement of indemnity which generally states that the purchaser is not liable for the vendor's actions before settlement and the vendor is not liable for the purchaser's actions after settlement.
[What is a Confidentiality Clause?]
[What is a Restraint of Trade?]
Business Sale Agreement for a Franchise Business
If you are selling a franchise business your business sale agreement will include conditions which are relevant to the franchise sale.
The intellectual property of the business will not be included in the list of assets sold as the franchisor will own the intellectual property rights. The right to use the business name and systems will be provided to the purchaser under the terms of the franchise agreement (which the purchaser will enter into with the franchisor).
The operation of the business sale agreement will be subject to the purchaser being approved by the franchisor and entering into a franchise agreement with the franchisor.
[What is Intellectual Property?]
[What is a Franchise Agreement?]
Our Business Sale Agreement Services
We will:
- draft a business sale agreement for a fixed fee that accurately reflects the agreement (including the sale of a franchise business);
- negotiate any amendments to the business sale agreement;
- assist with the settlement of the sale of the business to ensure that everything that is required has been completed.
