Complete Schedules: The Backbone of a Strong Purchase Agreement

In both share and asset purchase transactions, the body of the purchase agreement often receives the most attention. Yet, it is the schedules—those annexed lists and supporting documents—that give the purchase agreement its full effect. When schedules are omitted, incomplete or vague, even the best-drafted purchase agreement can fail to deliver the protection or clarity buyers and sellers expect.

What Are Schedules?

In a purchase and sale agreement, schedules serve as attachments that provide the specific details referenced in the main body of the agreement. Examples include: a list of tangible assets (e.g. equipment, vehicles); a list of customers or contracts being assigned; the corporate minute book (in a share purchase transaction); a schedule of intellectual property such as websites, patents, trademarks and logos; a list of employees and details of their employment terms; copies of material agreements; financial statements, tax filings; and any applicable permits.

These documents are not merely background material—they are integral to defining what specifically is being purchased and the representations being made about those items that are being transferred.

Why Complete Schedules Matter

1. They define what’s being purchased and sold: Without a complete asset list or clear description of assumed liabilities, there can be confusion—or even litigation—over whether certain items were included in the sale.
2. They clarify the scope of representations and warranties: Many representations are qualified by disclosures made in the schedules. For example, a seller might represent that “there are no material contracts except as set out in Schedule 3.1(d).” If the schedule is incomplete, the representation could become unintentionally misleading or expose the seller to liability.
3. They are often relied upon after the transaction closes:  After closing, schedules are frequently consulted to resolve disputes, interpret covenants, or guide integration. If schedules are vague or incomplete, they may provide little value when the buyer or seller needs them most.
4. They help satisfy due diligence requirements: For buyers and their lenders, complete schedules provide the information needed to verify what they are acquiring, assess risk, and value the transaction appropriately.
5. They can support or undermine indemnity claims: Many indemnities and limitations of liability hinge on whether a matter was disclosed in the schedules. If a liability was not disclosed, a buyer may have a claim; if it was properly disclosed, the seller may be protected. That protection only works if the schedules are thorough and accurate.

Practical Tips

1. Start early: Sellers should begin compiling schedules as soon as the letter of intent or memorandum of understanding is signed.
2. Use clear cross-referencing: Ensure each reference in the purchase agreement points clearly to a corresponding schedule.
3. Do not treat schedules as ‘appendices’: They are part of the legal agreement and must be treated with the same level of care.
4. Ensure accuracy and completeness: Especially for financial data, contracts, litigation, and customer or supplier lists.
5. Use a closing checklist or closing agenda: This helps ensure that all necessary schedules are finalized and agreed to before closing.

Final Thoughts

In any M&A (Mergers and Acquisitions) deal, the schedules are not an afterthought—they are central to the transaction. Incomplete schedules can lead to misunderstandings, post-closing disputes, and even litigation. Whether you are a buyer or seller, working with experienced legal counsel to prepare and review the schedules is critical to protecting your interests and achieving a successful closing.

If you’re considering buying or selling a business, our team can guide you through the process and ensure your transaction documents—including the schedules—are complete, accurate, and enforceable. Contact us to learn how we can support you every step of the way.

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