An asset purchase agreement is a legal contract signed between a buyer and a seller to transfer ownership of one or multiple assets for a certain price. In this article, you will discover the key topics to be included in a Florida asset purchase agreement.
Asset Purchase Agreement in Florida – An Introduction
An asset purchase agreement must be properly tailored to accomplish distinct goals at once. The primary element of this document is a detailed description of the assets involved in the transaction.
This type of contract is often used in business purchases to separate which assets will be excluded from the sale and which ones will be acquired by the new owner. Additionally, the document must outline the responsibilities and rights of the parties involved.
Using vague or uncertain language results in a grey area where one of the parties can take advantage of the terminology and find an excuse for an unexpected dispute. Hence, the assistance of a well-versed contract attorney is much-welcomed throughout the whole process.
What Should Be Included in an Asset Purchase Agreement in Florida? – Full Overview
Who Are the Parties Involved in the Agreement?
A contract is a legally binding document that creates an obligation for the parties who signed it. Correctly Identifying the seller and the buyer is the first step to avoiding future disputes.
Larger businesses have multiple subdivisions, especially if the transaction involves two or more corporations. The terms must specify the individuals or departments involved and leave no room for doubtful thoughts.
Which Assets Are Part of the Agreement?
Another key aspect of a solid asset purchase agreement is describing the assets being sold as specifically as possible.
For example, if a company is selling part of its real estate, the agreement must provide an exact description of the property, including the size, buildings, and other aspects. These aspects must match the information contained in business and government records, as mismatches can expose the whole transaction to the risk of failure.
How Much Will be Paid for the Assets Listed in the Agreement?
If there is a seller and a buyer, the contract must outline how much must be paid in the acquisition of the assets described in the document. Not only the asset purchase agreement must provide the price paid for the assets, but also define the terms by which payments must occur.
For instance, some buyers may also use stocks or securities as a means of payment, while other transactions might allow buyers to finance a portion of the amount and then pay the remainder in installments.
Are Warranties Detailed in the Agreement?
A warranty is a type of indemnity to protect the buyer if the purchased asset does not meet the conditions established in the contract. Using the agreement, the seller must provide the warranty and outline any due disclaimers.
In Florida, most asset purchase agreements have a “Representation & Warranties” section covering these topics, including the condition of the assets being sold (if applicable) and the legal status of the parties signing the contract.