VIC Contract Law - New Business Purchase and Contract of Sale?

[10legswalking]

Hi, I am about to purchase a new business that is not operational at the present time. Therefore I am only purchasing the equipment, some intellectual property which I may not use anyway, as it does not have a good name and the current business name. There is no debt owing on the equipment.

What I would like to know is, if the seller and I are able to legally create our own mutually agreed contact of sale under contract law without using the standard business sales contract and the use of a solicitor. The cost of the business is quite small and fairly low risk. To reduce the risk, I could actually purchase the equipment separately, also so it would be classed as a second hand sale of equipment. The current owner is also happy to give me the IP to manage until I can create new names and IP etc.

 

[Paul Cott]

Hi legs,

I would see no reason why you couldn't use a carefully crafted own contract instead of the standard one.

I would be interested to hear others' views.

Paul.

 

[Tim W]

I agree with @Paul Cott - it's certainly possible.

Take note however, of Paul's phrase "carefully crafted".
DIY has to be gotten right, and unless you are capable of doing it yourself,
and properly, DIY is very high risk.

 

[Rod]

Agree DIY is possible.

Read up on General Security Agreements and make sure the seller has clear title to the goods he is selling.

The agreement about IP also needs to in writing if it is important to you. I started with a business sale contract from a lawyer over 10 years ago and have modified and changed it to suit circumstances both as buyer and a seller. Saved many thousands on legal fees over that time. Depending on the sale price, initially spending a few thousand on a proper contract can be worth it. Wouldn't spend more than 10% of price. preferably <5%, on fees else you lose value. If you personally know a business owner they may be willing to share their info with you.

 

[DennisD]

If you've had lots of exposure to these sorts of contracts before then it may be possible to do an ok DIY job. Please take note of what Paul Cott and Tim W say, ''carefully drafted''

The value of good drafting becomes apparent not when the contract is sitting on your shelf but when you take it off the shelf because things have gone pear shaped in some way

 

[10legswalking]

Hi legs,

I would see no reason why you couldn't use a carefully crafted own contract instead of the standard one.

I would be interested to hear others' views.

Paul.

Thanks Paul, i think i should be able to put my own together and i have some examples of contracts that i can use as examples

 

[10legswalking]

Thank you everyone for your feedback, it is much appreciated.