The consideration for any sale and purchase of shares or business is likely to be one of the most important matters to be agreed between the seller and buyer. However, it should not be-all and end-all.

The seller and buyer may need to do certain acts or obtain third parties’ consent before completion of the sale and purchase to ensure that there is no breach of their contractual obligations to other parties, conditions of licences or laws. Such acts and consents should be made conditions precedent in the agreement.

The seller and buyer may also have other conditions, without which, they are not willing to complete the transaction. To the extent possible, such conditions should be fulfilled before completion of the transaction.

The rationale is the parties’ must-have’s should be in place before the agreement becomes unconditional and the parties complete the transaction. The period before an agreement becomes unconditional is typically the stage when parties could walk away from a deal without much loss.

It is not just about the money. What are the other must-have’s for the transaction to complete?

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This post was first posted on Linkedin on 4 February 2021.