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Business Purchase Agreement with Guarantee


A business or asset sale is the transfer of assets which make up a business from a buyer to a seller. Whilst the standard business purchase agreement template (BPA) does not include a guarantee, this template adds a guarantee, which will usually be put in place at the request of the buyer.

A guarantee provides additional comfort and security to a buyer in relation to the assets or business that they are buying. This template has been drafted so that the guarantor will guarantee the performance of the seller under the BPA and indemnify the buyer against all costs associated with any failure of the seller to comply with the terms of the BPA. However, the guarantee has also been drafted so as to be limited in time and amount. This can be adjusted according to the needs of customers using the template.

The guarantor may be a private individual or a corporate entity such as a limited company, however it is important that the guarantor is a person or entity that is able to legally and financially give the guarantee and the buyer should satisfy itself as to this. If the guarantor is a corporate entity, it may be necessary for the buyer to check their constitutional documents to ensure the guarantor has the express power to provide a guarantee. The buyer should also ensure that the guarantor is able to warrant the information in relation to the business or assets in the same way as the seller.

A guarantee must be in writing (or evidenced in writing) and signed by the guarantor or a person authorised by the guarantor (section 4, Statute of Frauds 1677) and this template includes nominal consideration from the buyer to the guarantor to cover any argument about whether good consideration has been given as this template is not proposed to be signed as a deed.

In all other respects the provisions of this template are the same as for the standard BPA template. Customers should note that this template includes short form, basic warranties, which may need to be extended depending on the transaction in question. The template also does not include tax provisions (except limited VAT provisions) or tax warranties. Independent tax advice must be sought.

Once you have purchased access to the appropriate document folder click on the “Download Document” button below. You will be asked what you want to do with the file. It is recommended that you save the document to a location of your choice prior to viewing.

Business Purchase Agreement with Guarantee is part of Corporate Documents. Just £35.00 + VAT provides unlimited downloads from Corporate Documents for 1 year.

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