This review list is intended to educate you about this document and to guide you in its preparation. A bulk sale has the advantage of absolving the buyer of potential liability for the seller’s debts. However, the goods themselves may be seized if any of the seller’s creditors has a claim against them. As a result, the buyer should be cautious of any potential liabilities of this nature and carefully consider the possibility of such claims arising. Obtaining indemnification from the seller is a prudent course of action; however, the indemnification is only as good as the Seller’s creditworthiness.
- Make several copies. Consider seeking expert legal advice regarding the risks associated with bulk transfer agreements prior to entering into such agreements.
- Maintain duplicates in the corresponding files.
- Ensure that proper notice is given to creditors in accordance with the UCC notification requirements.
Bulk Sale Agreement, Simple
Bulk Sale Agreement, Simple
____________, referred to as SELLER, and ___________, referred to as BUYER, agree:
SELLER shall sell to BUYER the following goods:
______________________________________________________________The total purchase price shall be $_______ (_________________ _______ &___/100 dollars). The BUYER shall pay a deposit of $ ______ (_____________&___/100 dollars) no later than _____________, 20___. The balance of the purchase price shall be paid no later than _____________, 20___. Delivery of the same shall take place on no later than
_____________, 20___, at _______________, ____________________,
______________.This sale shall be pursuant to the Section 6 of the Uniform Commercial Code (referred to herein as the “Bulk Sales Law”) of the State of ____________.
SELLER shall provide to BUYER a complete and sworn list of creditors, including those who assert claims, but which are disputed by SELLER, even if those claims are groundless or false.
The SELLER shall be under a continuing duty to supplement the list of creditors if there are any changes or new claims asserted, even if the same are groundless or false.
At least _________ days before the closing scheduled herein, the BUYER shall give notice of the transfer, as is provided in the Bulk Sales Law, to all creditors, including those who are listed as disputed. The SELLER shall fully cooperate with BUYER in the mailing of the notices and the provision of information necessary to complying with the provisions of the Bulk Sales Laws.
There are no liens upon the property to be sold by BUYER, and BUYER shall indemnify the SELLER from the claims of any entities to the sold goods.
The risk of loss to the property shall be borne by the SELLER until closing. In the event that 3% (three percent) or less of the value of the goods are lost, at the option of BUYER, the BUYER may either deduct the value of the damaged goods, or may accept an assignment of insurance proceeds, and pay the full contract price.
In the event that more than 3% (three percent) of the value of the property is destroyed, the BUYER shall have the right to rescind this contract, or to close, and to accept an assignment of insurance proceeds.
Each party represents to the other that there are no brokers or agents employed in relation to this agreement.
Time shall be of the essence in this agreement.
This contract constitutes the entire agreement between the parties and there are agreements, express or implied, that are not stated herein. This agreement may only be modified by a writing executed by both parties herein.
Dated: _______________________________
__________________________, by Buyer
__________________________, by Seller
Bulk Sale Agreement, Simple
Review ListThis review list is provided to inform you about this document in question and assist you in its preparation. A bulk sale has the advantage of not making the buyer potentially liable for debts of the seller. The goods themselves, however, can be attached if any of the seller’s creditors have claims against them. For this reason, the buyer should beware of any potential liabilities of this kind and investigate thoroughly the possibility that any such claims may arise. Getting indemnification from the seller is a wise idea; however, the indemnification is only as good as the creditworthiness of the Seller.
1. Make multiple copies. Consider getting expert legal advice as to the risks involved in bulk transfer before entering such agreements.
2. Keep copies in the related files.
3. Be sure proper notice is sent out to the creditors, per the UCC notification requirements.
Frequently Asked Questions
What is a bulk sale agreement?
A bulk sale agreement is a contract in which a seller transfers goods to a buyer in a transaction governed by Article 6 of the Uniform Commercial Code, known as the Bulk Sales Law. The agreement outlines the goods sold, the purchase price, payment terms, and delivery details. It also requires the seller to provide a sworn list of creditors and to supplement that list if changes occur.
What does the Uniform Commercial Code require in a bulk sale?
Under the Bulk Sales Law, the seller must provide the buyer with a complete and sworn list of creditors, including those whose claims are disputed, groundless, or false. The seller also has a continuing duty to supplement this list if there are any changes or new claims. The sale must be conducted pursuant to Section 6 of the Uniform Commercial Code of the specified state.
What information must be included in a bulk sale agreement?
A bulk sale agreement must identify the seller and buyer, describe the goods being sold, state the total purchase price, and specify the deposit amount and payment deadlines. It should also include the delivery date and location, reference the applicable Bulk Sales Law, and require the seller to provide a sworn list of creditors. The agreement may also mention the deadline for providing the creditor list before closing.
How is payment structured in a bulk sale agreement?
The buyer typically pays a deposit by a specified date, with the remaining balance due by a later date. The agreement sets out the exact amounts and deadlines for both the deposit and the final payment. All payment terms are negotiable and must be clearly stated in the contract.
What is the seller's duty regarding the list of creditors?
The seller must provide a complete and sworn list of creditors, including those who assert claims that are disputed, groundless, or false. The seller also has a continuing duty to supplement the list if there are any changes or new claims asserted. This obligation ensures the buyer is aware of all potential claims against the goods.
When does delivery take place in a bulk sale?
Delivery must occur no later than the date specified in the agreement, at the designated location. The agreement includes a blank for the delivery date and the address where the goods will be transferred. Both parties should agree on these details before signing.
What is the deadline for providing the list of creditors before closing?
The agreement includes a blank for the number of days before closing by which the seller must provide the list of creditors. This deadline is intended to give the buyer sufficient time to review the claims. The exact number of days is left to the parties to negotiate and fill in.
Can a bulk sale agreement be used for any type of goods?
The agreement is designed for the sale of goods as defined under the Uniform Commercial Code. It does not specify particular types of goods, so it can be adapted for various tangible items. However, parties should ensure compliance with applicable state law and any specific regulations for their goods.
What happens if the seller fails to provide a complete list of creditors?
The agreement does not specify penalties for non-compliance, but the Bulk Sales Law may impose consequences. The seller's continuing duty to supplement the list means that failure to do so could breach the agreement. Buyers should consult legal counsel to understand their remedies under state law.
Is a bulk sale agreement legally binding?
Yes, when properly executed, a bulk sale agreement is a legally binding contract between the seller and buyer. It must comply with the Uniform Commercial Code of the specified state to be enforceable. Both parties should review the terms carefully and seek legal advice if needed.
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