Purchase Price Agreement for United Arab Emirates

Purchase Price Agreement Template for United Arab Emirates

A Purchase Price Agreement under UAE law is a comprehensive legal document that establishes the terms and conditions for the sale and purchase of assets, shares, or business interests. Operating within the UAE's civil law framework, this agreement details the purchase price, payment terms, conditions precedent, warranties, and completion mechanics. The document must comply with UAE Federal Law No. 5 of 1985 (Civil Code) and other relevant commercial regulations, incorporating specific requirements for commercial transactions in the UAE, including free zone considerations where applicable. It serves as a binding contract that protects both parties' interests while ensuring compliance with local legal requirements and commercial practices.

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What is a Purchase Price Agreement?

A Purchase Price Agreement is a crucial document used in commercial and corporate transactions within the United Arab Emirates. This agreement is essential when conducting asset purchases, share transfers, or business acquisitions, providing a legally binding framework that outlines the complete transaction structure. The document must align with UAE's civil law system, particularly Federal Law No. 5 of 1985 (Civil Code) and Federal Law No. 18 of 1993 (Commercial Transactions Law). It's commonly used in both domestic and international transactions where at least one party is based in the UAE or the transaction falls under UAE jurisdiction. The agreement typically includes detailed provisions on purchase price calculation, payment mechanisms, conditions precedent, warranties, and completion requirements, while also addressing specific UAE regulatory requirements and market practices.

What sections should be included in a Purchase Price Agreement?

1. Parties: Identification of buyer and seller with full legal names, addresses, and registration details as per UAE requirements

2. Background: Context of the transaction and brief description of the subject matter being purchased

3. Definitions: Definitions of key terms used throughout the agreement

4. Purchase Price: Detailed specification of the purchase price, currency, and payment structure

5. Payment Terms: Payment schedule, method of payment, and any conditions precedent to payment

6. Transfer of Title and Risk: Provisions regarding when and how ownership and risk transfer from seller to buyer

7. Seller's Representations and Warranties: Warranties regarding ownership, condition, and quality of the subject matter

8. Buyer's Representations and Warranties: Warranties regarding authority to enter into agreement and financial capacity

9. Conditions Precedent: Conditions that must be satisfied before completion of the purchase

10. Completion: Details of the completion process, timing, and deliverables

11. Post-Completion Obligations: Ongoing obligations of parties after completion

12. Confidentiality: Provisions regarding confidential information and its protection

13. Governing Law and Jurisdiction: Specification of UAE law as governing law and jurisdiction for disputes

14. Force Majeure: Provisions for unforeseen circumstances preventing performance

15. Notices: Process and requirements for formal communications between parties

16. General Provisions: Standard boilerplate clauses including severability, entire agreement, and amendments

What sections are optional to include in a Purchase Price Agreement?

1. Due Diligence: Detailed provisions regarding the due diligence process, used when the purchase requires significant investigation of assets or business

2. Regulatory Approvals: Required when the transaction needs specific regulatory clearances in the UAE

3. Environmental Matters: Required when the purchase involves real estate or businesses with environmental implications

4. Employee Matters: Used when the purchase involves transfer of employees or labor-related considerations

5. Intellectual Property: Required when the purchase includes IP rights or licenses

6. Tax Matters: Detailed tax provisions when the transaction has significant tax implications

7. Escrow Arrangements: Used when part of the purchase price is held in escrow

8. Anti-corruption Compliance: Required for high-value transactions or those involving government entities

9. Shareholder Approval: Required when the transaction needs shareholder approval under UAE Company Law

What schedules should be included in a Purchase Price Agreement?

1. Asset Schedule: Detailed list and description of assets being purchased

2. Purchase Price Calculation: Detailed breakdown of purchase price components and calculations

3. Form of Transfer Documents: Templates of documents required for transfer of ownership

4. Disclosure Schedule: Seller's disclosures against warranties

5. Required Consents: List of third-party and regulatory consents required

6. Encumbrances: List of any existing encumbrances on the purchase subject matter

7. Due Diligence Findings: Summary of key due diligence findings and resolutions

8. Completion Checklist: List of actions and documents required for completion

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 | Serial Founder & Legal AI Author

Publisher

Genie AI

Document Type

Sales Agreement

Sector

Sales

Cost

Free to use
Relevant legal definitions
Clauses
Relevant Industries

Real Estate

Manufacturing

Retail

Technology

Financial Services

Healthcare

Energy

Construction

Hospitality

Transportation

Professional Services

Trading

Industrial

Education

Telecommunications

Relevant Teams

Legal

Finance

Corporate Development

Mergers & Acquisitions

Commercial

Risk & Compliance

Treasury

Business Development

Corporate Secretariat

Operations

Due Diligence

Relevant Roles

Chief Executive Officer

Chief Financial Officer

Legal Counsel

Corporate Lawyer

Finance Director

Business Development Manager

Mergers & Acquisitions Manager

Commercial Director

Investment Manager

Corporate Secretary

Risk Manager

Compliance Officer

Transaction Manager

Contract Manager

Due Diligence Officer

Industries
Teams

Employer, Employee, Start Date, Job Title, Department, Location, Probationary Period, Notice Period, Salary, Overtime, Vacation Pay, Statutory Holidays, Benefits, Bonus, Expenses, Working Hours, Rest Breaks,  Leaves of Absence, Confidentiality, Intellectual Property, Non-Solicitation, Non-Competition, Code of Conduct, Termination,  Severance Pay, Governing Law, Entire Agreemen

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