Essentially, the purchase agreement sets out all the details of the transaction so that both parties share the same understanding. The terms generally included in the agreement include the purchase price, the closing date, the amount of serious money that the buyer must submit as a down payment and the list of items included in the sale and not. Signing and closing a transaction at the same time (when the parties sign the SPA and conclude the sale on the same day) is the preferred and easiest way to close a transaction. However, sometimes a time interval between signature and completion is required to meet certain pending final conditions. These are referred to as “conditions precedent” and typically include approvals from tax authorities, regulatory approval of mergers, and third-party (e.B approvals. if there is a provision to change control in a substantial contract of the business for sale). By buying a new contract to purchase legal documents, for example, an insurance broker wants to sell his list of clients – the broker`s goodwill – for $50,000. The buyer does this in the hope that the customers on the list will continue to use the buyer as an insurance broker. Typically, in these circumstances, the seller introduces the buyer to the customer and declares that the buyer is his successor in order to encourage customers to continue to take out insurance with the buyer. If the seller does not sign a competition agreement as part of the goodwill sale, he can simply open a business across the street and continue to sell insurance. Of course, all of the company`s existing customers go across the street and buy insurance from the seller with whom they already have a relationship. The buyer will have purchased a goodwill of $50,000, which has been reduced to zero.

For this reason, competitive agreements are crucial in goodwill sales and also in sales of hard assets. If you have signed the purchase contract and all the conditions set out therein are met, you must complete the purchase of the property. Closing occurs when legal ownership of the shares passes to the buyer, causing the buyer to own the target company. A closing plan at the SPA typically lists all the documents to be signed and other actions necessary for closing to influence the transaction. .