Purchasers and their financers will require satisfactory inspection reports as a condition for closing the transaction. An asset purchase agreement should include clear procedures for inspection, and clear standards for determining whether the inspected assets comply with the terms of the agreement.
22 different convenience stores were sold to a restaurant business in North Dakota, pursuant to an asset purchase agreement. The acquisition was subject to certain regulatory approvals and other customary closing conditions, including the receipt of satisfactory inspection reports related to the stores.
Takeaway:
- The inspection of assets that are the subject of an asset purchase agreement may often determine whether the asset purchase agreement comes to fruition.
- While this underlying post does not add any substantive information, it’s a good example of the extra care that most buyers would want to include when acquiring assets - whether it is a chain of convenience stores, or otherwise.
- A residential home-buyer would often also require a home inspection prior to closing, but as you can see here, it is also possible to negotiate a post-closing inspection of the assets that are being purchased.