This month a business purchase agreement with a guarantee has been added to
the portfolio of business sale templates.
Business or asset sale agreements are where the buyer is acquiring the
assets which make up the business and not the shares in a company. These
assets can be both tangible (property, land, plant, equipment and stock)
and intangible (intellectual property and goodwill). Guarantees are often
given at the request of the buyer and are a way of adding extra comfort
that the buyer is buying the assets or business that they expect.
The guarantor under this BPA guarantees:
· the due and punctual performance of the seller’s obligations;
· that every statement, warranty or disclosure is true and accurate; and
· that it will indemnify the buyer against all costs caused by the seller’s
failure to comply with the term of the BPA.
Giving a guarantee is a potentially serious legal and financial obligation,
however, as with any guarantee, it is only as good as the identity of the
guarantor and it is important for the buyer to satisfy themselves as to
this and the guarantor’s knowledge and association with the assets being
sold and the seller. The guarantee in this template has been drafted to be limited in time
As with our standard BPA template, this template is a short form document
designed for a relatively simple transaction, with short form warranties
and no tax provisions (other than limited VAT provisions). It is essential
that before embarking on a business sale, customers take all necessary
legal, tax and financial advice.
The contents of this Newsletter are for reference purposes only and do not constitute
legal advice. Independent legal advice should be sought in relation to any specific