COMMERCIAL PURCHASE AND SALE AGREEMENT
(Arkansas – [COUNTY] County)
[// GUIDANCE: This template is intentionally comprehensive. Practitioners should delete bracketed guidance text and modify placeholders before circulation.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Purchase and Sale; Purchase Price; Deposit
- Title and Survey
- Environmental Matters
- Zoning and Land Use Compliance
- Representations and Warranties
- Covenants
- Conditions Precedent
- Closing
- Default; Remedies
- Risk Allocation
- Dispute Resolution
- Miscellaneous Provisions
- Execution Blocks
1. DOCUMENT HEADER
COMMERCIAL PURCHASE AND SALE AGREEMENT (“Agreement”) dated as of [EFFECTIVE DATE] (the “Effective Date”), by and between [SELLER LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Seller”), and [BUYER LEGAL NAME], a [STATE OF FORMATION] [ENTITY TYPE] (“Buyer”). Seller and Buyer are sometimes referred to individually as a “Party” and collectively as the “Parties.”
Recitals
A. Seller is the fee simple owner of certain real property located at [PROPERTY ADDRESS], consisting of approximately [ACRES/SQUARE FEET] and all improvements thereon (collectively, the “Property”).
B. Buyer desires to purchase, and Seller desires to sell, the Property on the terms set forth herein for good and valuable consideration, the receipt and sufficiency of which are acknowledged.
NOW, THEREFORE, in consideration of the mutual covenants herein contained, the Parties agree as follows:
2. DEFINITIONS
For ease of reference, the following capitalized terms shall have the meanings set forth below. Capitalized terms used but not defined herein shall have their plain meaning in context.
“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.
“Business Day” – Any day other than Saturday, Sunday, or an Arkansas state or U.S. federal holiday.
“Closing” – The consummation of the transaction contemplated herein, to occur on the Closing Date.
“Closing Date” – The date on which Closing occurs, as established under Section 10.1.
“Deposit” – The earnest money deposit described in Section 3.2.
“Due Diligence Documents” – All materials delivered or made available by Seller pursuant to Section 4.4.
“Environmental Laws” – All federal, state, and local statutes, regulations, and ordinances (including Ark. Code Ann. Title 8) relating to environmental protection, contamination, or hazardous substances.
“Inspection Period” – The period specified in Section 4.1 for Buyer’s investigations.
“Permitted Exceptions” – Those title matters approved or deemed approved by Buyer under Section 4.2.
“Purchase Price” – The consideration set forth in Section 3.1.
“Title Company” – [TITLE COMPANY NAME], or such other title insurer selected by Buyer and reasonably acceptable to Seller.
[// GUIDANCE: Add or delete defined terms as needed for the specific transaction.]
3. PURCHASE AND SALE; PURCHASE PRICE; DEPOSIT
3.1 Purchase and Sale. Subject to the terms herein, Seller agrees to sell and convey, and Buyer agrees to purchase, the Property for [PURCHASE PRICE IN WORDS] U.S. Dollars (US$[NUMERICAL]) (the “Purchase Price”).
3.2 Deposit.
(a) Within two (2) Business Days after the Effective Date, Buyer shall deposit [DEPOSIT AMOUNT] with the Title Company (the “Deposit”) by wire transfer.
(b) The Deposit shall be held in an interest-bearing escrow account; interest follows principal.
(c) Except as otherwise provided herein, the Deposit shall become non-refundable upon expiration of the Inspection Period and shall be applied to the Purchase Price at Closing.
3.3 Payment of Purchase Price. At Closing, Buyer shall pay the Purchase Price, less the Deposit, by federal wire transfer of immediately available funds to the escrow account designated by Title Company.
3.4 Allocation of Purchase Price. At least five (5) Business Days prior to Closing, the Parties shall mutually agree on an allocation of the Purchase Price among real and personal property for income-tax reporting purposes in accordance with IRC § 1060.
4. TITLE AND SURVEY
4.1 Inspection Period. Buyer shall have [NUMBER] days after the Effective Date (the “Inspection Period”) to conduct any inspections, tests, and studies of the Property deemed necessary by Buyer in its sole discretion.
4.2 Title Commitment; Review.
(a) Within five (5) Business Days after the Effective Date, Seller shall cause the Title Company to issue to Buyer a current commitment for an owner’s policy of title insurance (the “Title Commitment”), together with legible copies of all recorded exceptions.
(b) Buyer shall have until the earlier of (i) expiration of the Inspection Period or (ii) ten (10) Business Days after receipt of the Title Commitment to provide written notice (“Title Objection Notice”) of any unacceptable exceptions.
(c) Seller shall have five (5) Business Days after receipt to elect to cure such objections. If Seller fails or elects not to cure, Buyer may (i) waive the objections and proceed to Closing with such matters constituting Permitted Exceptions, or (ii) terminate this Agreement and receive a return of the Deposit.
4.3 Survey. Buyer may obtain, at Buyer’s expense, an ALTA/NSPS Land Title Survey. Any survey objections shall be handled in accordance with Section 4.2.
4.4 Delivery of Due Diligence Documents. Within five (5) Business Days after the Effective Date, Seller shall deliver or make available to Buyer the items listed on Exhibit A (collectively, the “Due Diligence Documents”).
4.5 Arkansas Real Property Transfer Tax. Buyer shall be responsible for the documentary stamps required under the Arkansas Real Property Transfer Tax Act, Ark. Code Ann. §§ 26-60-101 et seq.
5. ENVIRONMENTAL MATTERS
5.1 Environmental Representations. Seller represents that, to Seller’s Knowledge, (a) no Hazardous Substances have been released on, under, or migrating from the Property in violation of Environmental Laws; (b) Seller has received no written notice of violation or liability under Environmental Laws that remains uncured; and (c) there are no underground storage tanks in use on the Property.
5.2 Environmental Indemnity.
(a) Seller shall indemnify, defend, and hold harmless Buyer and its Affiliates from and against any and all losses, liabilities, claims, damages, costs, and expenses (including reasonable attorneys’ fees) arising out of (i) the presence, release, or disposal of Hazardous Substances on or about the Property attributable to the period prior to Closing, or (ii) Seller’s breach of Section 5.1.
(b) Buyer shall indemnify, defend, and hold harmless Seller from and against any and all such losses arising out of Buyer’s activities on the Property after Closing.
5.3 Phase I/Phase II. Buyer may, at its sole cost, conduct Phase I and, if recommended, Phase II environmental assessments. Seller shall provide reasonable access for such inspections.
5.4 Survival. The obligations in this Section 5 survive Closing indefinitely.
[// GUIDANCE: Consider adding escrow holdbacks or remediation covenants if environmental conditions are discovered.]
6. ZONING AND LAND USE COMPLIANCE
6.1 Zoning Warranty. Seller represents that the Property is currently zoned [ZONING CLASSIFICATION] and that Seller has received no written notice of any pending rezoning, condemnation, or material land use restriction.
6.2 Buyer’s Verification. Buyer may verify zoning compliance through direct inquiries with [LOCAL PLANNING AGENCY]. Any adverse zoning finding shall be treated as a title objection under Section 4.2(b).
6.3 Post-Closing Cooperation. Seller shall reasonably cooperate, at no cost to Seller, in Buyer’s efforts to obtain any required zoning variances, permits, or re-platting, provided such efforts do not delay Closing.
7. REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations. Seller makes the representations and warranties set forth in this Section 7.1 as of the Effective Date and as of Closing:
(a) Authority. Seller is duly organized, validly existing, and in good standing; execution and performance of this Agreement have been duly authorized.
(b) Title. Seller has good and marketable fee simple title to the Property, free of all liens other than Permitted Exceptions.
(c) No Foreign Person. Seller is not a “foreign person” within the meaning of IRC § 1445.
(d) Litigation. No pending or, to Seller’s Knowledge, threatened litigation materially affecting the Property.
(e) Leases. Except as disclosed on Exhibit B, no leases or occupancy agreements affect the Property.
(f) Compliance with Laws. To Seller’s Knowledge, the Property is in compliance with applicable laws, including Environmental Laws and building codes.
(g) Tax Payments. All real property taxes and assessments due and payable have been paid or will be paid at or prior to Closing.
7.2 Buyer’s Representations.
(a) Authority. Buyer is duly organized and has full authority to enter into and perform this Agreement.
(b) Funds. Buyer will have sufficient immediately available funds or financing to consummate Closing.
7.3 Survival. Seller’s representations and warranties survive Closing for [SURVIVAL PERIOD, e.g., 12 months]. Buyer’s representations survive Closing indefinitely.
7.4 Knowledge Standard. “Seller’s Knowledge” means the actual knowledge of [NAME/TITLE] without duty of inquiry or investigation.
8. COVENANTS
8.1 Seller’s Interim Covenants. From the Effective Date until Closing, Seller shall:
(a) Operate and maintain the Property in substantially the same manner as prior to the Effective Date;
(b) Not enter into, amend, or terminate any lease, service contract, or other agreement affecting the Property without Buyer’s prior written consent;
(c) Maintain existing insurance coverage;
(d) Provide prompt written notice to Buyer of any event that would render Seller’s representations inaccurate.
8.2 Buyer’s Covenants. Buyer shall conduct all inspections in a manner that does not unreasonably interfere with Seller’s operations and shall restore any physical alterations caused by such inspections.
8.3 Confidentiality. Except as required by law, each Party shall keep confidential this Agreement and all non-public information obtained in connection herewith.
9. CONDITIONS PRECEDENT
9.1 Buyer’s Conditions. Buyer’s obligation to close is contingent on:
(a) Title Company’s readiness to issue an ALTA Owner’s Policy in the amount of the Purchase Price subject only to Permitted Exceptions;
(b) Receipt of all estoppel certificates or lease consents listed on Exhibit B;
(c) Accuracy of Seller’s representations as of Closing;
(d) Completion of Buyer’s due diligence to Buyer’s satisfaction or waiver thereof.
9.2 Seller’s Conditions. Seller’s obligation to close is contingent on:
(a) Buyer’s performance of its obligations under this Agreement;
(b) Receipt of the Purchase Price and all required closing deliverables.
9.3 Waiver. A Party may waive, in writing, any condition precedent for its benefit.
10. CLOSING
10.1 Closing Date. Closing shall occur on [DATE] or such earlier date as the Parties may agree, via escrow with the Title Company.
10.2 Closing Deliverables.
(a) Seller shall deliver:
(i) Special Warranty Deed in recordable form;
(ii) Bill of Sale for personal property;
(iii) FIRPTA affidavit;
(iv) Owner’s affidavit and gap indemnity;
(v) Assignments of leases and contracts;
(vi) Evidence of authority and good standing;
(vii) Any other state-specific or local forms required for recording.
(b) Buyer shall deliver:
(i) Purchase Price funds;
(ii) Evidence of authority;
(iii) Counterparts of all assignments and receipts.
10.3 Prorations and Closing Costs.
(a) Real property taxes, assessments, rents, and operating expenses shall be prorated as of 11:59 p.m. on the day preceding the Closing Date.
(b) Buyer shall pay (i) the Arkansas documentary transfer tax, (ii) the cost of the title insurance premium (optional: split 50/50), and (iii) recording fees. Seller shall pay deed preparation and its share of escrow fees.
(c) Each Party bears its own legal and professional fees.
11. DEFAULT; REMEDIES
11.1 Seller Default. If Seller fails to perform its obligations, Buyer may, as its sole and exclusive remedies:
(a) Sue for specific performance; or
(b) Terminate this Agreement and receive prompt return of the Deposit, plus reimbursement of Buyer’s out-of-pocket due diligence expenses not to exceed [CAP AMOUNT].
11.2 Buyer Default. If Buyer fails to close without Seller default, Seller may, as its sole remedy, retain the Deposit as liquidated damages (not a penalty), the Parties acknowledging the difficulty of calculating Seller’s actual damages.
11.3 Notice and Cure. Except for failure to close on the Closing Date, the non-defaulting Party must provide written notice of default and a [NUMBER]-day cure period prior to exercising remedies.
12. RISK ALLOCATION
12.1 Indemnification. Environmental indemnification is provided in Section 5. All other indemnities are limited to breaches of representations, warranties, or covenants herein.
12.2 Limitation of Liability. Except for (i) fraud, (ii) willful misconduct, or (iii) obligations under Section 5, each Party’s aggregate liability arising out of this Agreement shall not exceed [CAP PERCENT]% of the Purchase Price.
12.3 Insurance. Until Closing, Seller shall maintain existing property and casualty insurance. Post-Closing, Buyer shall obtain and maintain insurance customary for similarly situated commercial properties in Arkansas with limits not less than [COVERAGE AMOUNTS].
12.4 Force Majeure. Neither Party shall be liable for delay or failure in performance caused by events beyond such Party’s reasonable control (including natural disasters, war, terrorism, pandemics, or governmental orders), provided that the affected Party gives written notice within five (5) Business Days of the event. The Closing Date shall be extended for the duration of the force majeure event, not to exceed thirty (30) days.
13. DISPUTE RESOLUTION
13.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Arkansas, without regard to its conflict-of-laws principles.
13.2 Forum Selection. Any legal action arising out of this Agreement shall be brought exclusively in the state courts located in [COUNTY] County, Arkansas. The Parties consent to personal jurisdiction and venue therein.
13.3 Arbitration. [SELECT ONE by deletion]
Option A – Arbitration Elected: Any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules. Judgment on the award may be entered in any court of competent jurisdiction.
Option B – Arbitration Not Elected: The Parties decline arbitration; disputes shall be resolved solely in the courts specified in Section 13.2.
13.4 Jury Trial Waiver. [INCLUDE OR DELETE] EACH PARTY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ITS RIGHT TO A TRIAL BY JURY.
13.5 Injunctive Relief. The Parties agree that monetary damages may be inadequate and that specific performance and other equitable relief are appropriate remedies for any breach or threatened breach of this Agreement.
14. MISCELLANEOUS PROVISIONS
14.1 Notices. Notices shall be in writing and deemed given upon (a) personal delivery, (b) confirmed email with PDF attachment, (c) national overnight courier (next Business Day delivery), or (d) certified mail, return receipt requested, to the addresses set forth below each Party’s signature.
14.2 Amendments; Waivers. No amendment or waiver of any provision shall be effective unless in a writing signed by the Party to be bound.
14.3 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to an Affiliate controlled by Buyer. Any assignment shall not release Buyer from liability unless Seller expressly agrees in writing.
14.4 Successors and Assigns. This Agreement binds and benefits the Parties and their respective successors and permitted assigns.
14.5 Severability. If any provision is held unenforceable, the remaining provisions shall remain in full force, and the unenforceable provision shall be reformed to the minimum extent necessary to effectuate the Parties’ intent.
14.6 Integration. This Agreement, together with the Exhibits and any documents executed pursuant hereto, constitutes the entire agreement between the Parties and supersedes all prior understandings.
14.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which is deemed an original, and all of which constitute one instrument. Signatures transmitted electronically (e.g., via PDF or DocuSign) shall be deemed original and binding.
14.8 Time of the Essence. Time is of the essence with respect to all dates and deadlines herein.
14.9 No Third-Party Beneficiaries. Except as expressly stated, nothing herein confers any rights or remedies on any person other than the Parties and their permitted successors and assigns.
14.10 Further Assurances. Each Party shall execute and deliver such additional documents and take such further actions as may be reasonably necessary to give effect to this Agreement.
14.11 Survival. Any provision that by its nature should survive Closing or termination (including Sections 5, 11, 12, 13, and this Section 14.11) shall so survive.
15. EXECUTION BLOCKS
IN WITNESS WHEREOF, the Parties have executed this Agreement as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: _____
Name: ____
Title: ____
Date: ______
BUYER:
[BUYER LEGAL NAME]
By: _____
Name: ____
Title: ____
Date: ______
[NOTARY ACKNOWLEDGMENT – Arkansas form]
EXHIBIT A
Due Diligence Document List
1. Most recent title policy and survey
2. Environmental reports (Phase I/II, asbestos, lead)
3. Copies of all leases, amendments, and tenant correspondence
4. Service, maintenance, and management contracts
5. Real estate tax bills and assessment notices (last 3 years)
6. Zoning confirmations and certificates of occupancy
7. Insurance loss run reports (last 5 years)
8. Utility bills (last 12 months)
9. Permits, licenses, and warranties affecting the Property
10. Notices of violation or pending litigation
EXHIBIT B
Schedule of Leases / Tenant Estoppels
[Populate as applicable]
[// GUIDANCE: Exhibits may be expanded to include a form of deed, bill of sale, assignment, and any state-specific closing affidavits required by Arkansas statutes or local recording offices.]