This document is an optional clause which can be inserted into a business sale agreement.
The method of payment is the most fundamental issue that is forgotten in major transaction negotiations. There are many iterations of how payment can be made, including cash, bank cheque, and allotment of shares in the purchaser company.
Sometimes the purchaser is permitted to set off any amount owing against the purchase prices, most times not. This document clause provides the more conventional methods in which payment of the purchase price is made.
Using this document
This precedent clause can be used in a sale of business agreement. It can also be inserted into the “General” provisions of the separate documents “Business sale agreement – sale of assets (short form)” and “Business sale agreement – sale of shares (short form)”.
When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.
This document has been authored for Lexis Nexis by Elise Margow, Principal, Legally Speaking.
This document is prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates