Purchase and Sale Agreements are required when a person or entity acquires another business or assets of another business. These sorts of documents are common place and if you are in the market to purchase an existing entity with ongoing operations, this is a document that you should become quite familiar with before actually signing on the line. It is also a complex document that should be drafted by an attorney. Many people that I have spoken to over the years have not wanted to hire an attorney because of the additional cost. However, when you are spending hundreds of thousands and even millions of dollars on purchasing a new company or business assets, saving a little bit of money on attorney’s fees is not worth it if you mess the whole thing up and it costs you big time in the future.
Here is a basic run down of a Purchase and Sale Agreement. It is a lot like a Residential Real Estate Contract, but with some additional terms and sections that make it a much more complex document that a Realtor or broker, absent a corresponding law license, should not be drafting from scratch on their own.