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Contingency Sales Agreement for Australia

Contingency Sales Agreement Template for Australia

An Australian-jurisdiction agreement that establishes the terms and conditions for a sale transaction subject to specified contingencies. This document outlines the rights and obligations of both seller and buyer, including the specific conditions that must be met before the sale becomes final, payment terms, timeframes, and risk allocation. It incorporates relevant provisions from Australian consumer law, state-specific fair trading regulations, and includes necessary consumer protections and warranties as required under Australian legislation.

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What is a Contingency Sales Agreement?

The Contingency Sales Agreement is a crucial commercial document used in Australian business transactions where the completion of a sale is dependent on specific conditions being met. This agreement type is commonly utilized when parties wish to proceed with a sale subject to certain events occurring or requirements being satisfied, such as obtaining financing, completing due diligence, or receiving regulatory approvals. The document is structured to comply with Australian federal and state legislation, including the Competition and Consumer Act 2010 and relevant state-specific fair trading laws. It provides a framework for managing conditional sales transactions while protecting the interests of both parties through clear specification of contingencies, timeframes, and consequences of non-fulfillment.

What sections should be included in a Contingency Sales Agreement?

1. Parties: Identifies and provides full details of all parties to the agreement

2. Background: Explains the context and purpose of the agreement, including the nature of the contingent sale

3. Definitions and Interpretation: Defines key terms used throughout the agreement and establishes interpretation rules

4. Sale and Purchase: Details the core transaction, including the subject matter of the sale

5. Contingency Conditions: Specifies the conditions that must be met for the sale to proceed

6. Purchase Price and Payment Terms: Outlines the agreed price and payment structure, including any deposits or installments

7. Timing and Performance: Sets out timeframes for meeting contingencies and completing the sale

8. Representations and Warranties: States the promises and guarantees made by each party

9. Risk and Title: Establishes when risk and ownership transfer between parties

10. Default and Termination: Specifies what constitutes default and the consequences of breach

11. Dispute Resolution: Outlines the process for resolving disputes between parties

12. General Provisions: Contains standard boilerplate clauses including notices, governing law, and entire agreement

What sections are optional to include in a Contingency Sales Agreement?

1. Intellectual Property: Required when the sale involves IP rights or licenses

2. Confidentiality: Needed when sensitive information will be exchanged during the contingency period

3. Due Diligence: Include when the buyer needs to conduct investigations before finalizing the sale

4. Regulatory Compliance: Required when the sale is subject to specific regulatory approvals

5. Insurance: Include when specific insurance requirements need to be maintained during the contingency period

6. Third Party Consents: Needed when the sale requires approval from external parties

7. Assignment and Novation: Include when parties may need to transfer their rights or obligations

8. Force Majeure: Optional protection against unforeseen events affecting performance

9. GST Provisions: Required for sales that involve GST considerations

What schedules should be included in a Contingency Sales Agreement?

1. Schedule 1 - Sale Items: Detailed description of goods or assets being sold

2. Schedule 2 - Purchase Price Calculation: Breakdown of purchase price components and calculation method

3. Schedule 3 - Contingency Conditions Details: Detailed explanation of conditions and verification requirements

4. Schedule 4 - Due Diligence Requirements: List of required documents and investigations

5. Schedule 5 - Completion Checklist: List of actions required for completion of the sale

6. Appendix A - Form of Notice: Template notices for key communications

7. Appendix B - Required Consents: List of required third-party or regulatory consents

8. Appendix C - Warranty Schedule: Detailed warranties given by each party

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Australia

Publisher

Genie AI

Document Type

Sales Agreement

Sector

Cost

Free to use

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