Whether you are using a pre-printed form (for example. B an approved agreement of the Association of Realtors) or a tailor-made document, the contract must contain the following „contingencies“ or safeguard measures to protect the interests of each party in the transaction: a sales contract is sometimes signed, making the conclusion conditional on the completion of certain steps such as obtaining authorizations. assignment of contracts or that the seller carries out certain operations in advance (sale of land or corresponding legalization in the corresponding register). The contract consists of five main parts: (1) Description of the transaction; (2) terms of the contract; (3) insurance and guarantees; (4) limitations of liability; (5) Terms. If more specific risks are identified during due diligence, it is likely that they will be covered by appropriate set-off in the sales contract in which the seller promises to reimburse the buyer for compensatable liability on a book-by-pound basis. Buying and selling a business can be divided into two stages: a sales contract is just an agreement to sell the business at a certain time in the future. On the reference date, the closing documents must be exchanged between the buyer and the seller for the sale. For example, a sales contract is an end document required to legally transfer the assets of a business from the seller to the buyer on the closing date. The GSP does not transfer assets on its own – it simply says that ownership of the assets must be transferred through a sales contract upon conclusion. The company also needs different authorizations or licenses for its specific type of operation. The complexity of preparing and completing the final documents becomes clear when you take into account the following requirements when concluding a share sale (note: the applicability of each document depends on the transaction): the articles of association of a company determine who can sign agreements on behalf of a company and whether these people – usually directors and / or senior managers – can appoint someone else to approve an agreement.
The buyer usually has a conditional period of five to twenty days after the execution of the GSP to carry out due diligence and ensure financing. The purchase and sale contract may also limit the seller`s liability by setting the maximum amount a seller must pay in the event of a breach of the insurances, guarantees and agreements received. The limit can be an amount corresponding to the purchase price or a percentage of the purchase price. Or there may be specific limits to compensation for certain types of losses, i.e. breaches of general insurance and guarantees will result in a maximum payment of 30% of the purchase price, while breaches of environmental guarantees and guarantees will result in a payment of up to 50% of the purchase price. In the case of fundamental infringements such as ownership of shares or assets, the limit is often not lower than the purchase price. A survival period limits the period during which a buyer can initiate a dispute for breach of insurance, guarantees or obligations. The usual survival periods are 12 to 36 months for general insurance and guarantees, six months after the expiry of the limitation period for tax matters and six months after the expiry of the applicable limitation period for fundamental guarantees and guarantees, such as.B. the power to conclude the contract of sale and ownership of the assets. .