Business sale agreement lawyer in Paris: negotiating the SPA and securing the closing.

The letter of intent, or LOI, sets out in writing the parties' wish to enter into exclusive negotiations with a view to a sale. It fixes the indicative price, the due diligence timetable, the exclusivity period and confidentiality. It does not normally commit the parties to sign the SPA, but it can give rise to liability on the part of a party that abruptly breaks off negotiations (Cass. com., 26 November 2003, No. 00-10.243). The firm drafts or reviews it systematically before signature.

A confidentiality agreement (NDA) is necessary but not always sufficient. It must cover not only financial information but also customer contracts, key employees, patents and strategy. The usual sanction is a quantified penalty clause (often €100,000 to €500,000 depending on sensitivity), coupled with a ban on poaching key employees for a period of twelve to twenty-four months. The burden of proving a leak remains on the seller.

In practice, the range is forty-five to ninety days for a small or medium-sized business, extendable once. If it is too short, there is no time to carry out the due diligence; if it is too long, it ties up the seller if the buyer drags its feet. The firm recommends firm exclusivity with a long-stop date and an extension clause conditional on actual progress of the work.

A well-drafted financing condition precedent specifies the maximum amount sought, the maximum rate accepted, the minimum number of banks approached and the time limit for producing the refusals. Without these details, the buyer can artificially cause the condition to fail. Article 1304-3 of the Civil Code then deems the condition fulfilled, which reverses the liability.

An earn-out is a price supplement indexed to the target's performance after closing (revenue, EBITDA, margin over two or three years). The main pitfall is the lack of a strict definition of the perimeter (change of accounting method, intra-group re-invoicing, allocation of central costs). The firm requires an annual audit by a third-party expert and a fast arbitration mechanism in the event of disagreement.

Signing is the signature of the SPA. It binds the parties subject to conditions precedent. Closing is the actual transfer of ownership of the shares: share transfer orders, payment of the price, delivery of the registers. Between the two, anything from a few days to several months may pass while the conditions (financing, approvals, authorisations) are lifted. In practice, closing may be simultaneous (signing = closing) or deferred.

Yes, in principle, where the failure is not attributable to the party who benefits from the condition. The SPA may provide for a retention or a penalty, but it must remain proportionate. If the failure results from a fault of the beneficiary (refusal to produce documents, failure to take the necessary steps), the deposit may be kept as damages. Escrow held by a notary or a lawyer secures the transaction.

Tort liability under Article 1240 of the Civil Code. Compensable loss includes negotiation costs, due diligence costs and preliminary studies. The Manoukian case law (Cass. com., 26 November 2003, No. 00-10.243) excludes compensation for the lost profit (the profits expected had the transaction been completed). In practice, compensation is quantified between €50,000 and €300,000 depending on the size of the matter.

If the bilateral promise to sell is perfected (determinable price and agreement on the essential elements under Article 1583 of the Civil Code) and the conditions precedent have been lifted, the seller may seek court-ordered specific performance backed by a daily penalty. The Morgane Groupe case law (Cass. com., 28 May 2025, No. 24-13.902) confirms that exercising the option turns the promise into a sale, even if the price still has to be completed by an expert.

Yes, except in marginal cases. The GAP protects the buyer against liabilities predating closing that are revealed afterwards (tax reassessment, concealed employment tribunal dispute, latent defect in a key asset). The usual cap is 10 to 15% of the sale price, adjustable according to sector risk. The neighbouring page devoted to the GAP details this mechanism.

French law, by default. But the parties may choose another governing law and a foreign court, in particular in cross-border transactions or when a foreign fund takes a stake in the capital. In the absence of a valid jurisdiction clause (Article 48 of the Code of Civil Procedure), the court with territorial jurisdiction is in principle that of the place where the defendant resides or, for a company, is established (Articles 42 and 43).

For a share transfer, the deed does not have to be registered, but tax registration is required within one month for payment of the transfer duty (0.1% for SAS shares, 3% with an allowance for SARL shares). For the sale of a business, the deed is published in the BODACC and the price is held in escrow during the creditors' opposition period. This subject is covered on a dedicated page.

Every sensitive point identified in the due diligence is translated into SPA clauses: explicit representations from the seller, specific conditions precedent, exclusions from the warranty for known and accepted risks, and a price retention where appropriate. Without rigorous due diligence, the SPA is drafted blind and exposes the buyer to costly discoveries.

For a small or medium-sized business in the Paris region valued at between €1 million and €5 million, the fee range is generally between €8,000 and €25,000 excl. VAT, excluding financial and tax due diligence. The firm offers a fixed fee for standardised transactions, and time-based billing for multi-seller transactions or those with a complex earn-out. A detailed quote is prepared after reading the LOI.

No, never. The firm acts for only one side of the table in any given M&A transaction, in accordance with the professional rules on conflicts of interest. This strict line guarantees full and complete defence of the entrusted client's interests. If an opposing party contacts the firm on a matter already under way, it is immediately referred to an independent colleague.