Define: Sale Consideration
Sale Consideration is the total payment or value a seller receives when disposing of or transferring securities, assets, or other property under a contract. It is used to calculate proceeds, tax liability, and contractual obligations tied to a disposal, and is typically defined precisely so both parties agree on what counts toward the sale price.
Legal accuracy standard set & glossary spot-checked by Imad Mohammed Nazar , Skadden-trained M&A lawyer, Legal Engineer at GenieAI
What Sale Consideration Means in a Contract
Sale Consideration refers to the total value received by a seller in exchange for transferring ownership of securities, goods, property, or other assets. In most agreements it is not simply the headline purchase price, but the full economic benefit flowing to the seller, which can include cash, deferred payments, assumed liabilities, or non-cash consideration such as shares or property received in exchange.
The term is commonly found in agreements involving the disposal of shares, business interests, or tangible assets, where the parties need a clear, agreed figure to calculate obligations such as tax, indemnities, or earn-out payments. Because the figure can be used for multiple downstream calculations, contracts usually define it with precision rather than leaving it to a general understanding of.
Relevant Circumstances
- Privatisation of a government entity
- The sale of a minority stake by a large corporation
- A company spin-off