The buyer acquires identified assets and expressly assumes only specified liabilities. Unassumed liabilities remain with the seller entity, subject to successor liability doctrines that may override the allocation.
Consents are required for non-assignable contracts.
Alternative Names:
APA|Asset Purchase
Why it Matters?
Successor liability doctrines are what defeat the liability allocation the structure was chosen to achieve, particularly the product line exception in states recognizing it and de facto merger where the transaction resembles a combination. Environmental and employment obligations also transfer by operation of law in many circumstances regardless of the agreement. Diligence into those categories matters more in an asset deal than the allocation language suggests.
Frequently Confused with
Related terms
Frequently asked questions
Does an asset purchase avoid the seller's liabilities?
Which obligations transfer regardless?
