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Advanced Purchase Agreement Issues

David G. Ebner, Oil and Gas Acquisitions (1995)

Every purchase and sale agreement seeks to bind the parties to a proposed property transfer, subject only to the buyer's confirmation that the properties are, or at the time of transfer will be, what he believes them to be. The seller wishes simply to dispose of the properties; once the transaction has been consummated, he wishes to minimize his continuing responsibility, receive the promised consideration, and be able to embark upon new business endeavors. The representations, warranties, covenants and conditions reflect the buyer's desires in respect of the property, while the provisions detailing the consideration to be paid, together with the limitations upon survival of representations and warranties, reflect the buyer's desire to be compensated and then to escape, as quickly as possible, from further care in connection with the property.

Under this analysis, negotiating and drafting a purchase and sale agreement should be simple and straightforward; it is, after all, simply a matter of ascertaining a client's objectives and putting them on paper. Experienced lawyers recognize, however, that a great deal more is involved in securing this final written result. Clients who have had little negative experience in past transactions often believe that, because they know their business best, the lawyers are to act merely as scriveners in penning the final agreement that