Document background
The Deposit Agreement For Business Purchase is a crucial document used in Canadian business acquisition transactions to formalize the deposit arrangement between a potential buyer and seller. This agreement is typically executed during the early stages of a business purchase transaction, after initial negotiations but before the final purchase agreement is completed. It serves to demonstrate the buyer's serious intention to proceed with the purchase and provides security for the seller while detailed due diligence and final negotiations are undertaken. The agreement must comply with Canadian federal and provincial commercial laws and can be customized to address specific requirements of the transaction, such as multiple deposit payments, escrow arrangements, or conditional release terms. It's an essential tool for protecting both parties' interests during the business acquisition process and typically precedes the main purchase agreement.
