Every agreement for the purchase and sale of a business should have a section stating exactly how the purchaser and seller will send notices to the other after the agreement is signed. This concept may seem simple but the language used in this section is sometimes impractical and can cause problems.
First, it is important to understand the purpose of a notice section. The notice section describes how and to whom notices will be sent. Notices may need to be sent after the purchase agreement is signed. Other notices may need to be sent after the closing. For example, there could be a notice of a breach of the agreement or a notice of a change of address. Since the parties’ rights are often keyed into a period of time after a notice is sent, the notice language should be drafted to assure that a notice will be received. Often the notice language states that notices shall be sent by certified mail return receipt requested. Since that leaves the actual receipt of the notice in the hands of the other side to determine whether to retrieve the certified mail, a better practice is to state that notice is required to be sent either via overnight mail or hand delivery. In addition to those stated methods, reference should be made that notice can also be sent via email transmission. Copies of notices should be sent to the parties’ counsel representing them in the transaction. The parties should also make sure that the address specified in the notice section is an address at which the parties will definitely receive the notice. By including appropriate notice language, the purchaser will ensure that there will be no kinks in the procedural step necessary to allow the purchaser to enforce its legal rights.
ABOUT GLENN D. SOLOMON
Glenn D. Solomon Esq., is a principal at the law firm of Offit Kurman and has provided counsel to businesses and business owners for more than twenty-five years, with extensive experience in the purchase and sale of businesses, structuring ownership agreements, and advising companies in financial distress
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