This document is an optional clause which can be inserted into a business sale agreement.
Sometimes the vendor to business sale, by way of asset sale, is unable to obtain the consent from a party to assign or novate certain contracts to the purchaser. To ensure that the sale agreement is not terminated as a result of the failure to obtain such consent, it is possible for the parties to agree that the vendor sub-contract the obligations under the relevant contract to the purchaser, and do all things to ensure that the contract remains on foot.
This document clause sets out the process to be followed where a party refuses to grant consent to the assignment of a contract to the purchaser.
Using this document
This precedent clause is a condition document which can be used in a business sale agreement. It can also be inserted into the separate document “Business sale agreement – sale of assets (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 Jeremy Kriewaldt, Partner, Atanaskovic Hartnell and Elise Margow, Principal, Legally Speaking.
This document is documents prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates.