Many clients use the ContractsCounsel platform to hire a lawyer to draft or review a purchase agreement. During the drafting process of this document that provides legal protection for all parties, lawyers will ask clients which terms they want clearly included. While some provisions are standard, others are tailored to the specific asset or transaction.
At ContractsCounsel, we help clients make these terms a priority to protect their interests and clarify their responsibilities. Based on real data from the ContractsCounsel platform, these are the most requested terms clients ask lawyers to include:
1. Transition Support and Business Continuity
It’s common for buyers to request language in the agreement requiring the seller to provide post-closing transition support, such as in the form of training, introductions to key customers, or operational assistance. This helps the business to maintain continuity after the sale.
Takeaway: If you don’t feel confident you can manage the business on your own, it’s worth considering whether you should request that the seller remain involved for a set period to help with tasks during the transition.
2. Deposit Requirements and Payment Schedules
Clients often highlight payment structures, including deposit amounts, instalment plans, and timing of final payments. Your requests can range from partial down payments to detailed monthly or milestone-based schedules.
Takeaway: To prevent confusion, you should clearly define deposits and payment timing. If the deal gets delayed or cancelled, the agreement will protect both parties.
3. Non-Compete and Confidentiality Clauses
To protect the value of the purchase, buyers commonly request non-compete clauses, preventing the seller from starting a competing business. This is usually for a specific amount of time or within a specific geographical location. Confidentiality provisions are also requested to protect sensitive deal details and proprietary information during negotiations.
Takeaway: Don’t assume you’re safe from competition that could harm your business or that your trade secrets won’t be exposed. Lawyers will help you draft non-compete and confidentiality terms that are enforceable in your jurisdiction.
4. Indemnification and Hold Harmless Provisions
There’s always the chance that unexpected liabilities can crop up. Both buyers and sellers should ask for indemnification language to allocate risk if these arise. These agreement clauses will clearly define who bears responsibility for losses, defects, or legal claims after closing.
Takeaway: You should work with your lawyer to ensure that the risks will be divided fairly, preventing either side from having to shoulder unforeseen liabilities without protection.
5. Contingencies for Financing, Inspections, and Licensing
You might find that you want to renegotiate or cancel the deal. It’s common for clients to request contingencies that enable them to do this, such as if financing falls through, inspections reveal big problems, or required licenses aren’t secured.
Takeaway: Contingencies protect buyers from closing on a deal that no longer meets the agreed conditions or creates unexpected risks. It provides leverage so they can renegotiate the terms or exit the deal altogether.
6. Assignment and Transfer of Ownership
Purchase agreements often need precise language for the transfer of ownership, such as in terms of transferring stock, assets, or membership interests. Clients request clear procedures for assigning ownership rights and documenting the transfer to avoid messy disputes later.
Takeaway: You want the agreement to explain exactly how ownership will transfer to avoid post-closing disputes. This involves clearly defining how and when ownership will change hands so there are no doubts or uncertainties.
7. Asset Delivery and Condition Specifications
It’s a nightmare to buy a business only to discover that assets aren’t in working order. To prevent this scenario, clients commonly request clauses requiring assets to be delivered in good condition and/or defect-free. There can also be specific inspection rights before the sale is finalized.
Takeaway: Clarity is key: spell out the delivery standards and inspection rights you want to reduce disagreements about the quality or condition of assets and protect yourself from unnecessary risks.
8. Collateral and Security Interests
If deals contain seller financing or deferred payments, it’s common for parties to include terms allowing the seller to benefit from a security interest, such as collateral or a lien, until the payments are complete.
Takeaway: If the buyer isn’t paying everything upfront and financing is part of the deal, it’s essential to clarify what collateral secures the payments, how it can be enforced, and what happens if the payments aren’t made.
Why This Matters
Although purchase agreements vary widely by asset and transaction type, our project data shows that clients consistently request these key terms because they reduce their risk and ensure clarity throughout the purchasing process. Whether you’re buying or selling, addressing these issues upfront will protect both sides and prevent disputes.
Get Help With Your Purchase Agreement
If you need a purchase agreement drafted or reviewed, consider using ContractsCounsel’s platform to post your project and receive multiple proposals from vetted lawyers in our network who have the skills to tailor the contract to your specific transaction and needs.
