Agreement of Sale of a Liquor Licence: What You Need to Know
If you are planning to sell or purchase a liquor licence, you need to know about the agreement of sale. An agreement of sale is a legally binding contract that outlines the terms and conditions of the sale. It is important to understand the details of the agreement before signing it, as it can have serious implications for both the seller and the buyer.
Here are some important things to consider when entering into an agreement of sale for a liquor licence.
1. Price and Payment Terms
The agreement should specify the price of the liquor licence and the terms of payment. The payment can be made in full or in installments, but it is important to ensure that the payment schedule is clearly laid out in the agreement.
2. Transfer Process
Liquor licences are usually governed by state laws and regulations, and the transfer process can be complicated. The agreement should outline the responsibilities of both the seller and the buyer in the transfer process. This includes obtaining any necessary approvals or permits from the relevant authorities.
3. Liability and Indemnity
The agreement should clearly define the liability of both parties in case of any unforeseen circumstances. For instance, if the licence has any outstanding penalties or fees, the agreement should specify who is responsible for paying those.
4. Contingencies
Sometimes, unforeseen events can result in the cancellation or delay of the transfer of the liquor licence. The agreement should specify what happens in case of such contingencies, such as the loss of the licence or the inability to obtain necessary approvals.
5. Non-compete Clause
The seller may include a non-compete clause in the agreement, which prevents them from opening a competing business in the same area for a specific period of time. This clause should be carefully reviewed to ensure it is reasonable and does not unfairly restrict the buyer`s ability to operate their business.
In conclusion, entering into an agreement of sale for a liquor licence requires careful consideration and attention to detail. As a professional, I recommend hiring a legal professional who can help draft or review the agreement before signing it. This can help ensure that both parties are protected and the transfer process proceeds smoothly.