An asset purchase agreement is a legal document that regulates transactions involving the sale and transfer of assets. The document usually covers terms such as sales prices, descriptions of the assets to be sold, date and time of purchase, and the parties involved. It can also cover more specific information such as the methods and timing of the payments, interest rates, and other figures.
The asset purchase agreement is often drafted up towards the end of the negotiation stage, so that the parties can have a final record of their agreement. The document essentially operates as a contract, creating legally binding duties on each of the parties involved.
Asset purchase agreements generally apply to business assets such as:
- Stocks and other securities
- Shares of companies
- Business property
- Various other types of tangible and intangible assets
They don’t usually apply to an exchange of services, or to assets that are not yet in existence. In some cases, a purchase agreement can cover a wide range of assets, especially in deals that involve a mixture or “package deal” of assets.
Generally speaking, purchase agreements are final once they are accepted and signed by both parties (just like any contract). However, the agreement can sometimes contain a provision that permits the parties to make modifications to contract in the future. An example of this is where the contract is a recurring contract (for instance, if the parties deal with each other on an annual basis). In such cases, it may be necessary to modify or amend the contract if new factors come up in relation to the assets being sold.
Lastly, the courts may sometimes modify a purchase agreement if they feel this is necessary to resolve a legal dispute between the parties. A common example of this is where there is a vague or ambiguous term in the asset purchase agreement.
Purchasing assets should generally be accompanied with a written asset purchase agreement, so the parties have a record of the transaction. You may wish to hire a commercial lawyer if you need help negotiating or drafting/editing a purchase agreement. Your attorney can provide you with legal advice on how to complete the process. Also, your lawyer can represent you in court if you need to file a lawsuit or file a petition with the court.