What Is A Definitive Purchase Agreement?

Who drafts the definitive agreement?

The vendor of a business should always consider which party prepares the first draft of a definitive purchase agreement. The party that drafts the agreement will usually include terms favorable to them, but will also typically incur higher legal costs.

Is a definitive agreement legally binding?

Definitive Agreement means a legally binding agreement, mutually executed and delivered by authorized representatives of Buyer and Seller, setting forth the definitive terms and conditions of a Transaction.

What is the purpose of a definitive agreement?

A Definitive Purchase Agreement is used as a document to transfer the ownership of a company. The agreement also contains schedules or annexures describing the inventory list, key employees, tangible assets. They are stated as a fixed value in dollar terms., net working capital determination, etc.

What is the difference between an agreement and a MoU?

The agreement is a document in which two or more parties agreed upon to work together for a common objective, whereas the Memorandum of Understanding (MoU) is a written document which describes the terms of an agreement. An Agreement can be implied, but a MoU can never be implied.

What does DA mean in a SPAC?

Due Diligence.

The SPAC will do extensive due diligence on the target company, similar to due diligence in M&A or IPO transactions.

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