Which boilerplate clauses still need a decision before signing?
Boilerplate clauses that can still need a deliberate choice before signing include the confidentiality and announcement terms, the governing law and forum for disputes, the notice clause, and the clause saying which document controls in a conflict, and filed asset purchase agreements show each of them as a separate clause. On a touch screen, a tap shows all 5 sources in this group.
The price, payment timing and remedy terms are negotiated in their own clauses, covered under deposit, deferred payment, closing adjustment, earnout, allocation and remedies.
| Clause | Decision it records |
|---|---|
| Confidentiality | Whether an earlier confidentiality agreement continues and covers what the buyer learns under the purchase agreement. |
| Announcements | Who may tell employees, customers, suppliers and the public about the sale, and when. |
| Governing law | Which state's law governs the agreement. |
| Forum or arbitration | Which courts hear a dispute, or whether it goes to arbitration. |
| Notices | Who receives formal notices, at which addresses and emails, and when a notice counts as given. |
| Conflicts between documents | Which document controls when the purchase agreement, schedules and other transaction documents disagree. |
Confidentiality can begin before the purchase agreement is signed; one filed $700,000 e-commerce asset purchase agreement kept the parties' confidentiality agreement from seven months earlier in full force for information provided under the purchase agreement. Announcements are a separate choice, and that agreement barred public announcements without the other party's consent, not to be unreasonably withheld, unless the law required one. A larger filed agreement also required the seller and buyer to consult on how the seller's employees, customers and suppliers would be told, and gave the buyer the right to be present.
Governing law and the dispute forum are separate choices, and that e-commerce agreement made both, choosing New York law and submitting disputes to the exclusive jurisdiction of the federal and New York state courts. A filed online-service agreement instead sent any unresolved dispute to binding arbitration. Federal law makes a written arbitration provision in a contract involving commerce valid, irrevocable and enforceable, save on grounds that exist at law or in equity for revoking any contract or as otherwise provided in chapter 4 of the Federal Arbitration Act. Governing law also affects substantive terms, such as how long claims survive; Delaware, for example, lets a written contract involving at least $100,000 set a period for bringing claims of up to 20 years from accrual, and survival periods are covered under remedies.
A notice clause matters when a deadline runs from notice, such as an objection to a closing statement or an indemnity claim; in one filed agreement, a party facing an indemnity claim had 30 days after receiving notice of it to respond in writing. The same agreement treated a notice as given when delivered by hand or overnight courier, sent by e-mail with confirmation of transmission, or received or rejected if sent by certified mail. A conflicts clause decides which document wins, and the e-commerce agreement made the body of the purchase agreement control over the other transaction documents, exhibits and disclosure schedules, other than an exception expressly stated as such in the disclosure schedules. Sales in which a marketplace's standard form or an addendum also applies are covered under marketplace sales.
Sources for this answer
The iGourmet agreement barred public announcements about the transaction without the other party's consent, not to be unreasonably withheld, unless required by law, and required cooperation on timing and content.
Unless otherwise required by applicable Law, no party to this Agreement shall make any public announcements in respect of this Agreement or the transactions contemplated hereby without the prior written consent of the other party (which consent shall not be unreasonably withheld, conditioned or delayed), and the parties shall cooperate as to the timing and contents of any such announcement.
See §5.04; agreement dated Aug. 30, 2024
The iGourmet agreement chose New York law and submitted disputes to the exclusive jurisdiction of the federal courts or the New York state courts.
All matters arising out of or relating to this Agreement shall be governed by and construed in accordance with the internal laws of the State of New York, without giving effect to the conflict of law provisions thereof to the extent such provisions would require or permit the application of the laws of any jurisdiction other than the State of New York. Any legal suit, action, proceeding or dispute arising out of or relating to this Agreement, the other Transaction Documents or the transactions contemplated hereby or thereby may be instituted in the federal courts of the United States of America or the courts of the State of New York, and each party irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action, proceeding or dispute.
See §10.08(a); agreement dated Aug. 30, 2024
The iGourmet agreement made the body of the agreement control over inconsistent statements in the other transaction documents, annex, exhibits and disclosure schedules, other than an exception expressly set forth as such in the disclosure schedules.
In the event of any inconsistency between the statements in the body of this Agreement and those in the other Transaction Documents, the Annex, the Exhibits and the Disclosure Schedules (other than an exception expressly set forth as such in the Disclosure Schedules), the statements in the body of this Agreement will control.
See §10.05; agreement dated Aug. 30, 2024
The Luna agreement required the seller and buyer to consult on how the seller's employees, customers and suppliers would be informed of the transaction, with the buyer entitled to be present.
Seller and Buyer will consult with each other concerning the means by which Seller’s employees, customers, suppliers and others having dealings with Seller will be informed of the Contemplated Transactions, and Buyer will have the right to be present for any such communication.
See §13.2
The Luna agreement treated a notice as given when delivered by hand or overnight courier, sent by e-mail with confirmation of transmission, or received or rejected if sent by certified mail, to the designated addresses.
All notices, Consents, waivers and other communications required or permitted by this Agreement shall be in writing and shall be deemed given to a party when (a) delivered to the appropriate address by hand or by nationally recognized overnight courier service (costs prepaid); (b) sent by e-mail with confirmation of transmission by the transmitting equipment; or (c) received or rejected by the addressee, if sent by certified mail, return receipt requested, in each case to the following addresses or e-mail addresses and marked to the attention of the person (by name or title) designated below (or to such other address, e-mail address or person as a party may designate by notice to the other parties):
See §13.3
The Sitestar agreement sent any unresolved controversy or dispute between the parties to binding arbitration.
Any unresolved controversy or dispute between the Parties, including, without limitation, one arising out of or relating to this Agreement, the Acquired Assets or the Business, shall be settled by binding arbitration.
See §11.11; agreement dated Feb. 28, 2007
The Federal Arbitration Act makes a written arbitration provision in a contract evidencing a transaction involving commerce valid, irrevocable and enforceable, save upon grounds existing at law or in equity for revoking any contract or as provided in chapter 4.
A written provision in any maritime transaction or a contract evidencing a transaction involving commerce to settle by arbitration a controversy thereafter arising out of such contract or transaction, or the refusal to perform the whole or any part thereof, or an agreement in writing to submit to arbitration an existing controversy arising out of such a contract, transaction, or refusal, shall be valid, irrevocable, and enforceable, save upon such grounds as exist at law or in equity for the revocation of any contract or as otherwise provided in chapter 4
See 9 U.S.C. § 2.
The iGourmet agreement confirmed that the parties' earlier confidentiality agreement remained in full force and effect and applied it to information provided to the buyer under the purchase agreement.
Buyer acknowledges and agrees that the Confidentiality Agreement, dated as of January 18, 2024, between Buyer and Seller (the “ Confidentiality Agreement ”) remains in full force and effect and, in addition, covenants and agrees to keep confidential, in accordance with the provisions of the Confidentiality Agreement, information provided to Buyer pursuant to this Agreement.
See §5.03; agreement dated Aug. 30, 2024
Delaware allows a written contract involving at least $100,000 to set the period for bringing claims, up to 20 years from accrual.
(c) Notwithstanding anything to the contrary in this chapter (other than subsection (b) of this section) or in § 2-725 of Title 6, an action based on a written contract, agreement or undertaking involving at least $100,000 may be brought within a period specified in such written contract, agreement or undertaking provided it is brought prior to the expiration of 20 years from the accruing of the cause of such action.
See 10 Del. C. § 8106(c).
The Luna agreement gave the indemnifying party 30 days after receiving notice of a direct claim to respond in writing.
The Indemnifying Party shall have 30 days after its receipt of such notice to respond in writing to such Direct Claim.
See §11.5
Does the seller still own and run the business before closing, and what can the buyer require?
The seller still owns the business until closing when the agreement transfers the assets on the closing date, as one filed agreement did by providing that on the closing date the seller would sell, transfer, assign, convey and deliver the assets to the buyer.
For goods, Delaware's Uniform Commercial Code lets title pass from seller to buyer in any manner and on any conditions the parties explicitly agree, subject to its other rules and to Article 9. Ownership brings risk: one filed agreement placed the risk of loss, damage or condemnation of the assets on the seller at all times before closing.
What the buyer can require before closing is set by the covenants and consent standard in the signed agreement; in one filed agreement, the seller had to run the business only in the ordinary course and preserve its assets and goodwill unless the buyer consented in writing, and the buyer's consent was in its sole discretion. The standard is negotiable; another filed agreement required each party's written approval of public announcements, not to be unreasonably withheld or delayed. Access rights can be bounded as well: that agreement required the parties to use commercially reasonable efforts so that the buyer's access did not interfere unreasonably with the ongoing operation of the business. Its efforts covenant also excused either party from paying a third party to obtain a consent, except as the underlying contract required.
Scott Weavil recommends that sellers insist on conditions that are clearly defined and not overly subjective, to avoid giving buyers excessive leverage. Scott Weavil explains that a broad diligence condition, known as a diligence out, gives the buyer an option to walk away while binding the seller to the deal. An outside date limits how long the seller stays bound, as in one filed agreement that let the seller terminate if the buyer's closing conditions would not be fulfilled by a stated date, unless the seller's own failure to perform caused it; the buyer's pre-closing question describes that clause.
Sources for this answer
The Salem agreement provided that on the closing date the seller would sell, transfer, assign, convey and deliver the sale assets to the buyer.
On the “Closing Date” (as that term is defined in Section 2.1 herein), Seller shall sell, transfer, assign, convey and deliver to Buyer, and Buyer will purchase or acquire from Seller, free and clear of all “Liens” (as that term is defined in Section 3.3(a) herein), except for Permitted Liens, all right, title and interest, legal and equitable, in and to all properties, assets and rights used, useful or otherwise relating to the ownership, development and operation of the Business, other than the “Excluded Assets”, (as defined in Section 1.2) (collectively, the “Sale Assets”) as follows:
See §1.1
6 Del. C. § 2-401(1) states that, subject to its provisions and Article 9, title to goods passes from seller to buyer in any manner and on any conditions explicitly agreed by the parties.
Subject to these provisions and to the provisions of the Article on Secured Transactions (Article 9), title to goods passes from the seller to the buyer in any manner and on any conditions explicitly agreed on by the parties.
See 6 Del. C. § 2-401(1)
The Salem agreement placed the risk of loss, damage, impairment, confiscation or condemnation of the sale assets on the seller at all times before closing.
The risk of any loss, damage, impairment, confiscation, or condemnation of any of the Sale Assets from any cause whatsoever shall be borne by Seller at all times prior to the Closing.
See §7.5
The Sitestar agreement required the seller, before closing and except with the buyer's prior written consent in its sole discretion, to operate only in the ordinary course and preserve the business, assets and goodwill.
Except with the prior written consent of Buyer in its sole discretion, prior to the Closing Date, Seller shall conduct the Business only in the ordinary course and shall to the best of its ability do the following: (i) Preserve the Business and maintain the Acquired Assets and its business organization intact; (ii) Preserve the good will of contract parties, customers, clients, lessors, suppliers, employees of and others having relations with the Business;
See §8.2(a); agreement dated Feb. 28, 2007
The Salem agreement required the other party's prior written approval for announcements about the transaction, not to be unreasonably withheld or delayed.
No news release or other public announcement pertaining to the transactions contemplated by this Agreement will be made by or on behalf of any party hereto without the prior written approval of the other party (such consent not to be unreasonably withheld or delayed).
See §7.3(d)
The Salem agreement required commercially reasonable efforts so the buyer's access rights did not interfere unreasonably with the ongoing operation of the business.
The parties will exercise commercially reasonably efforts to ensure that the rights of Buyer under this Section 7.3 are exercised in such a manner as not to interfere unreasonably with the ongoing operation of the Business.
See §7.3(a)
The Salem agreement required reasonable best efforts to satisfy closing conditions but excused payments to third parties to obtain consents unless the underlying contract required them.
Subject to the terms and conditions of this Agreement, each of the parties hereto will use its reasonable best efforts to take all action and to do all things necessary, proper or advisable to satisfy any condition to the parties’ obligations hereunder in its power to satisfy and to consummate and make effective the transactions contemplated by this Agreement; provided, however, that no party shall be required to make any payments to any third party in order to obtain the consent of any third party (except as otherwise expressly contemplated by the underlying Contract).
See §7.1
Scott Weavil recommends that sellers insist on clearly defined, not overly subjective closing conditions.
However, sellers should ensure that conditions are clearly defined and not overly subjective to avoid giving buyers excessive leverage.
See Scott Weavil, M&A Deal Points: Simultaneous vs. Deferred Closings, Sierra Pacific Partners (Jan. 2, 2025).
Scott Weavil explains that a diligence-out condition gives the buyer an option to walk away while binding the seller.
Challenges: Risk of Conditionality: Some closing conditions, like a “diligence out” clause allowing the buyer to withdraw if not satisfied with due diligence, can create an imbalance. This essentially gives the buyer an option to walk away while binding the seller to the deal—a dynamic most sellers find unfavorable.
See Scott Weavil, M&A Deal Points: Simultaneous vs. Deferred Closings, Sierra Pacific Partners (Jan. 2, 2025).
The Luna agreement let the buyer or the seller terminate if the other's closing conditions would not be fulfilled by December 31, 2018, unless the terminating party's own failure to perform caused it.
(c) by Buyer, if any of the conditions set forth in Article 7 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by December 31, 2018, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants or agreements hereof to be performed or complied with by it prior to the Closing; (d) by Seller, if any of the conditions set forth in Article 8 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by December 31, 2018, unless such failure shall be due to the failure of Seller
See §9.1(c)–(d)
How can the buyer keep the business and its goodwill protected before closing?
A buyer who signs before closing can protect the business with interim operating covenants, such as the seller's promise in one filed agreement to conduct the business in the ordinary course, preserve the transferred assets and use commercially appropriate efforts to preserve the business's goodwill with third parties until closing.
A simultaneous signing and closing eliminates the provisions on how the business is operated between signing and closing, while in a deferred closing the closing conditions can be heavily negotiated, adding cost and the risk that the deal never closes. Practitioners describe the choice differently; Way Law observes that a simultaneous signing and closing is more common in sales of smaller businesses, while Imke Ratschko describes small-business agreements as often signed first and closed some time later. A deferred closing lets the parties lock in the price and terms while they obtain third-party consents and approvals, and regulatory approvals or financing dependencies can make deferral unavoidable. In one filed software-product sale signed on August 30, 2013, closing was set for October 10, 2013, subject to the seller satisfying stated conditions.
One filed agreement required the seller to operate only in the ordinary course consistent with past practice, preserve its business organization and assets, keep its employees and contractors available and preserve its relationships with customers and suppliers. Another required the seller to notify the buyer promptly of any breach of its representations or covenants, and barred it from selling or encumbering any transferred asset, or impairing its rights in them, without the buyer's prior consent. A buyer can also keep the business off the market: one filed agreement required the seller to end existing discussions with third parties about an acquisition proposal from signing until closing or termination.
A simultaneous closing needs no interim covenants, closing conditions or termination clauses, so a deferred closing adds four sets of terms:
| Term | What it settles |
|---|---|
| Closing conditions | What each party must see before it is obliged to close: consents, lien releases, accurate representations, delivered documents, and any financing or inspection condition. |
| Interim operating commitments | How the seller runs the business until closing: ordinary course, no sale of assets outside it, no new debts or long contracts without consent, and access for the buyer. |
| Termination rights | When either party can walk away: an outside date, an uncured breach, a failed condition, and what happens to any deposit. |
| Bring-down and closing deliverables | Confirmation at closing that the representations remain accurate, and the documents each party delivers. |
One filed agreement let either party terminate if the other side's closing conditions would not be fulfilled by a stated outside date, unless its own failure to perform caused the delay. Termination provisions also say what survives: in one filed agreement, termination ended the parties' obligations except for listed provisions such as confidentiality, and in another each party had to return, on request and without keeping copies, the documents it obtained from the other if the transaction did not close. The seller's side of the same period is covered in the seller's pre-closing question.
Sources for this answer
The Greenfield Online agreement required the seller, until closing, to conduct the business in the ordinary course, preserve the transferred assets and use commercially appropriate efforts to preserve the business's goodwill with third parties.
From the date hereof until the Closing Date, Seller shall conduct the Business in the ordinary course and shall preserve intact the Transferred Assets, and shall use its commercially appropriate efforts to preserve intact the Business’s goodwill with third parties.
See §5.1
Aimee B. Davis explains that a simultaneous signing and closing eliminates provisions on operating the business between signing and closing and certain closing deliverables.
This eliminates many provisions in the definitive purchase agreement, including how the business of the target company will be operated between signing and closing, as well as certain closing deliverables, such as “bring-down” certificates.
See Aimee B. Davis, What’s the Difference Between a Simultaneous Sign-and-Close and a Bifurcated Closing?, Aimee B. Davis Law P.C. (Oct. 16, 2023).
Aimee B. Davis explains that closing conditions in a deferred closing can be heavily negotiated, raising cost and the risk that the deal never closes.
In these transactions, the closing conditions can be heavily negotiated, often resulting in higher/increased transaction costs and potentially increasing risk that the transaction never closes because one or more closing conditions are not satisfied or waived.
See Aimee B. Davis, What’s the Difference Between a Simultaneous Sign-and-Close and a Bifurcated Closing?, Aimee B. Davis Law P.C. (Oct. 16, 2023).
Way Law observes that simultaneous signing and closing is more common in sales of smaller businesses.
As one might expect given the appearance of simplicity, sign and close closings are more common with the sale of smaller businesses.
See Way Law PLLC, Understanding Closing: Sign and Close vs. Sign Then Close (Apr. 1, 2025).
Imke Ratschko describes small-business APAs as often signed first and closed some time later.
The APA is often structured in a way where the parties first execute the APA and then some time goes by until the transaction is actually consummated and the business changes hands, which is called the Closing.
See Imke Ratschko, The Basics of an Asset Purchase Agreement, Ratschko PLLC (July 25, 2022; updated July 28, 2022).
Way Law explains that a deferred closing locks in deal terms while leaving time to obtain third-party consents and approvals.
A sign-then-close arrangement allows the parties to lock in material deal points like the purchase price, the representations, and warranties based on the due diligence, and then have time to secure these third-party consents and approvals.
See Way Law PLLC, Understanding Closing: Sign and Close vs. Sign Then Close (Apr. 1, 2025).
Scott Weavil observes that regulatory approvals or financing dependencies can make a deferred closing unavoidable.
If regulatory approvals or financing dependencies exist, a deferred closing may be unavoidable.
See Scott Weavil, M&A Deal Points: Simultaneous vs. Deferred Closings, Sierra Pacific Partners (Jan. 2, 2025).
The SofTech agreement, signed August 30, 2013, set its closing for October 10, 2013, subject to the seller satisfying stated conditions.
The purchase and sale (“Closing”) shall take place at Purchaser’s offices in Wilsonville, Oregon at 10:00 a.m. Pacific Standard Time on October 10, 2013 (“Closing Date”), subject to Seller satisfying the conditions set forth in Section 1.6.
See §1.5; agreement dated Aug. 30, 2013
The Bankrate agreement required the seller, before closing, to operate in the ordinary course, preserve its organization and assets, keep its workforce available and preserve key business relationships.
During the period from the date of this Agreement until the earlier of (x) the Closing or (y) the date this Agreement is terminated in accordance with its terms (such period, the “Pre-Closing Period”), Seller shall, and Owner shall cause Seller to, (i) operate the Business only in the ordinary course of business consistent with past practice, (ii) use its commercially reasonable efforts to preserve substantially intact its business organization and assets; (iii) use its commercially reasonable efforts to keep available the services of its employees and independent contractors; (iv) use its commercially reasonable efforts to preserve Seller’s relationships with customers, suppliers and other Persons with which Seller has significant business relationships; (v) pay all Indebtedness, Taxes and other obligations in the ordinary course of business and (vi) keep and maintain Seller’s assets and properties in good repair and normal operating condition, ordinary wear and tear excepted.
See §6.1
The Greenfield Online agreement required the seller to report breaches promptly and barred it, without the buyer's prior consent, from disposing of or encumbering transferred assets or impairing its rights in them.
(v) notify Buyer in writing of the occurrence of any breach by Seller of any of its representations or warranties made pursuant to Section 3, or any covenant or agreement contained in this Agreement, promptly after Seller becomes aware of any such breach. (b) without Buyer’s prior consent, Seller will not and will not agree to: (i) sell, assign, lease, license, transfer or otherwise dispose of, or mortgage, pledge or encumber (other than with Permitted Liens), any of the Transferred Assets; or (ii) waive, cancel or take any other action materially impairing any of its rights relating to the Transferred Assets.
See §5.1(a)(v), (b)
The Salem agreement required the seller, from signing until closing or termination, to cease existing discussions with third parties about any acquisition proposal.
From the date of this Agreement until Closing or the earlier termination of this Agreement in accordance with the terms of the same, Seller will immediately cease any existing discussions or negotiations with any third parties conducted prior to the date hereof with respect to any Acquisition Proposal (as defined below).
See §7.2
The Luna agreement let the buyer or the seller terminate if the other's closing conditions would not be fulfilled by December 31, 2018, unless the terminating party's own failure to perform caused it.
(c) by Buyer, if any of the conditions set forth in Article 7 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by December 31, 2018, unless such failure shall be due to the failure of Buyer to perform or comply with any of the covenants or agreements hereof to be performed or complied with by it prior to the Closing; (d) by Seller, if any of the conditions set forth in Article 8 shall not have been, or if it becomes apparent that any of such conditions will not be, fulfilled by December 31, 2018, unless such failure shall be due to the failure of Seller
See §9.1(c)–(d)
The Luna agreement ended the parties’ obligations on a pre-closing termination except for specified surviving provisions.
If this Agreement is terminated pursuant to Section 9.1, all obligations of the parties under this Agreement will terminate, except that the obligations of the parties in this Section 9.2 and Article 12 (the first and second sentences only) and 13 (except for those in Section 13.5) survive.
See §9.2
The Salem agreement required each party, if the transaction did not close and on request, to return without keeping copies the documents obtained from the other party.
If the transactions contemplated hereby are not consummated for any reason, each party shall, at the written request of the other party, return to such other party hereto, without retaining a copy thereof, any schedules, documents or other written information obtained from such other party in connection with this Agreement and the transactions contemplated hereby.
See §7.3(c)
Scott Weavil explains that a simultaneous sign-and-close needs no interim covenants, closing conditions or termination clauses.
This approach is straightforward: the deal closes as soon as it’s signed. Benefits: Simplicity: No need for interim covenants, closing conditions, or termination clauses.
See Scott Weavil, M&A Deal Points: Simultaneous vs. Deferred Closings, Sierra Pacific Partners (Jan. 2, 2025).