Topic 91

Purchase and Sale Agreement: Explanation by Section

Topic 91 presents a summary of the contents generally presented (contents vary deal to deal) in the body of the purchase and sale agreement (PSA) that a party to an M&A deal can expect to encounter. Italic paragraphs present commentary relevant to buyer and seller preferences. The PSA governs the conduct of the parties with respect to completing the deal and for periods of time following the closing and provides the basis for dispute settlements under contract law.


  • The parties to the agreement section recites the interests of the parties to enter the deal and includes:
    • Precise legal name, corporate form and domicile of seller and buyer
    • Seller's business definition and location
      • The business definition generally focuses on the products, markets, and customer group served, technologies utilized, and territory or field of use.
      • This section usually receives considerable attention. The definitions often are utilized in defining the noncompete provisions in the postclosing conditions and /or in noncompete agreements.
  • The recitals section presents the statement of buyer's desire to purchase and seller's desire to sell and the parties agreement to the terms of the (PSA).
  • The definitions section sets forth a glossary of key defined terms used in the PSA.
  • This section also receives considerable attention as the defined terms are referred to throughout the PSA and in other agreements ...

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