A lot of work, research, and commitment goes into the lead-up to a business sale transaction. Putting everything in writing protects the parties, clarifies expectations, and makes the deal enforceable. In Florida, business sale agreements can involve a variety of contracts — from asset and real estate transfers to employment agreements — and must comply with both state contract law and the Uniform Commercial Code (UCC).
Having the guidance of a professional business attorney in such a transaction will not only ensure that all of the details are memorialized but that the documents are legally enforceable. That’s particularly important in Florida, where the state’s Statute of Frauds requires certain contracts to be in writing.
Requirements for Contracts Under Florida Law
Contracts have specific purposes: usually, they serve as a legally enforceable agreement to deliver a certain good or service. In a contract, the businesses or individuals involved are named, the terms—such as due dates, quantities, styles, manufacturers, condition, and other specifications—are detailed, and the manner of recourse is enumerated if the contract is not honored. While some oral agreements are enforceable, proving their terms can be costly and uncertain, which is why written agreements are strongly preferred in Florida business sales.
In Florida, written contracts not only make terms easier to prove but also help avoid expensive litigation. Clear, specific terms regarding timelines, payment obligations, warranties, and dispute resolution give both buyer and seller greater security and predictability in the transaction.
When buying or selling a business there are potentially many contracts involved, some that are pre-existing and some that are new. Transferring contracts that the previous owner entered into requires examining the fine print to determine whether it remains in effect if a party to the contract has changed. Many contracts include “assignment” or “change of control” clauses that restrict transfers without the other party’s consent. Reviewing these clauses during due diligence can prevent disruptions after closing the sale. Some business sales are contingent upon getting consent from suppliers, landlords, and employees.
Buyers should carefully document any required consents in the purchase agreement to avoid post-closing disputes. Failure to secure these approvals can delay the sale or trigger default clauses in key business relationships.
Contracts that may transfer through a business sale include:
- real estate purchases or leases,
- non-compete or confidentiality agreements,
- employment contracts for employees,
- contracts for leased equipment and intellectual property,
- loan agreements or lines of credit,
- contracts with suppliers of business products, raw materials, transportation, and other goods and services.
Florida’s Statute of Frauds requires that certain contracts are written. This law is strictly enforced, even if a verbal agreement was in place. The following contracts must be in writing for a court to uphold them:
- Contracts for the sale of real estate
- Agreements for things that will not be performed in less than a year
- Agreements regarding a third party’s debts.
The sale of goods valued at $500 or more and covered by the state’s Uniform Commercial Code (UCC) must also be written in contracts. Items covered by the UCC include a broad range of moveable items, including: cars, electronics, crops, and minerals. This requirement is particularly important in the sales of businesses with inventory or equipment.
Partner With a Business Contract Expert
Buying or selling a business involves many moving parts. Having one of WKFK Law’s experienced business attorneys on your team will ensure that your transaction is completed to the highest legal standard, including ironing out transfers of contracts for goods, services, properties, and equipment. A thorough due diligence review should include examining every contract related to assets, employees, suppliers, and financing. This process ensures hidden liabilities are uncovered and that the transaction complies with Florida law. Call today for a consultation.
