A Sale and Contribution Agreement formalizes the transfer of assets or capital into a joint entity. This playbook analyzes valuation methods, assumption of liabilities, and closing deliverables.
Why This Matters: Well-defined exit rights mitigate the risk of lock-in and stranded liabilities if business circumstances change.
Negotiation strategy
If you're the Company:
Negotiate clear termination triggers and reasonable notice periods to ensure flexibility. Protect against stranded liabilities by defining post-termination obligations.
If you're the Seller:
Ensure termination rights are balanced and align with business objectives. Advocate for notice requirements that allow sufficient time for operational adjustments.
Essential elements
1
Termination Triggers
Conditions for contract termination.
2
Notice Period
Timeframe for termination notice.
3
Post-Termination Obligations
Responsibilities after contract ends.
Action framework
ACCEPT
Propose edits when termination triggers are unclear or overly restrictive.
EDIT
Reject clauses that impose excessive penalties or obligations.
ADD
Add language to define clear termination triggers and obligations.
PRO TIP
Ensure termination rights are jurisdiction-compliant to avoid legal complications.
Example clauses
FAVORABLE
Preferred Termination Clause
"Either party may terminate this Agreement upon 30 days' written notice if the other party materially breaches any term of this Agreement."
NEUTRAL
Standard Termination Clause
"Termination may occur with 60 days' notice for convenience, subject to payment of any outstanding obligations."
UNFAVORABLE
Restrictive Termination Clause
"Termination is only permitted upon mutual agreement, with no defined notice period."
Fallbacks
High-Risk Projects
In high-risk projects, termination rights should include specific risk mitigation measures and shorter notice periods.
Long-Term Contracts
For long-term contracts, ensure termination rights allow for periodic review and adjustment to align with evolving business needs.
Jurisdiction-Specific Requirements
Adapt termination clauses to comply with local laws, ensuring notice periods and obligations meet jurisdictional standards.
FEATURED SOLUTIONS
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WEEK 1
CLM Readiness and Design
Our CX team works with you to understand your contracting challenges, prioritize key workflows, and identify the biggest impact areas. We build a tailored implementation plan that fits your needs.
WEEK 2
Install Module
We connect DocJuris to your contract repositories, set up admin and user accounts, and ensure your environment is ready for success.
WEEK 3
Deliver & Test
Your team builds initial playbooks, reviews existing clause libraries, and trains the DocJuris agent to align with your internal standards and negotiation positions.
WEEK 4
Launch
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