COMMERCIAL AGREEMENT TO PURCHASE AND SALE
(Louisiana Real Estate – Commercial)
[// GUIDANCE: This template is designed for the purchase and sale of commercial real property located in Louisiana. It is drafted to Louisiana civil-law standards and is intended for adaptation by counsel familiar with the transaction and local practice.]
TABLE OF CONTENTS
- Document Header
- Definitions
- Purchase and Sale of Property
- Purchase Price; Earnest Money; Allocation of Consideration
- Due Diligence; Title and Survey
- Closing Conditions; Closing Deliverables
- Representations and Warranties
- Covenants of the Parties
- Environmental Matters and Indemnification
- Default; Remedies
- Risk Allocation; Limitation of Liability
- Dispute Resolution
- Miscellaneous / General Provisions
- Execution Block
1. DOCUMENT HEADER
COMMERCIAL AGREEMENT TO PURCHASE AND SALE
This Commercial Agreement to Purchase and Sale (the “Agreement”) is made and entered into effective as of [EFFECTIVE DATE] (the “Effective Date”), by and between:
• [SELLER LEGAL NAME], a [STATE OF FORMATION] [TYPE OF ENTITY] (“Seller”); and
• [BUYER LEGAL NAME], a [STATE OF FORMATION] [TYPE OF ENTITY] (“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 the real property located at [PROPERTY ADDRESS / PARISH], more particularly described on Exhibit A attached hereto (the “Land”), together with all improvements thereon (collectively with the Land, the “Property”).
B. Buyer desires to purchase, and Seller desires to sell, the Property on the terms and conditions set forth herein.
C. Louisiana law requires contracts for the sale of immovable property to be in writing. This Agreement is intended to satisfy that requirement.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Parties agree as follows:
2. DEFINITIONS
For purposes of this Agreement, the following capitalized terms have the meanings set forth below; other terms are defined in-line where first used.
“Affiliate” – Any entity controlling, controlled by, or under common control with a Party.
“Applicable Law” – All laws, ordinances, statutes, regulations, rules, orders, and judgments of any governmental authority having jurisdiction over the Property or the Parties, including without limitation all Louisiana real estate, environmental, and zoning laws.
“Closing” – The consummation of the purchase and sale contemplated herein, to occur on the Closing Date.
“Closing Date” – [CLOSING DATE], or such other date as the Parties may mutually agree in writing.
“Deposit” – The earnest money deposit described in Section 4.2.
“Due Diligence Period” – The period ending at 5:00 p.m. Central Time on [DD PERIOD EXPIRATION DATE], unless extended or terminated earlier in accordance with this Agreement.
“Environmental Laws” – All Applicable Law relating to pollution, protection of the environment, human health and safety, or the presence, use, storage, disposal, or release of Hazardous Substances.
“Escrow Agent” – [TITLE/ESCROW COMPANY NAME], or such other escrow agent mutually acceptable to the Parties.
“Hazardous Substances” – Any substance regulated under Environmental Laws, including petroleum products, asbestos-containing materials, lead-based paint, and mold.
“Title Company” – [TITLE COMPANY NAME].
[// GUIDANCE: Add or remove defined terms as necessary for the transaction.]
3. PURCHASE AND SALE OF PROPERTY
3.1 Sale and Conveyance. Subject to the terms of this Agreement, Seller agrees to sell, convey, and transfer to Buyer, and Buyer agrees to purchase from Seller, all of Seller’s right, title, and interest in and to:
a. The Land;
b. All buildings, fixtures, and other improvements located on the Land (the “Improvements”);
c. All rights, privileges, servitudes, easements, and appurtenances benefitting the Land (the “Appurtenances”);
d. Seller’s interest in all leases, licenses, and occupancy agreements affecting the Property (collectively, the “Leases”), subject to Section 6.2;
e. Seller’s interest in all intangible property related to the ownership, maintenance, and operation of the Property (the “Intangibles”).
3.2 “As-Is, Where-Is” Sale. Except as expressly provided in this Agreement and in the Seller Closing Documents, Buyer accepts the Property “AS-IS, WHERE-IS, WITH ALL FAULTS,” and Seller disclaims all warranties, express or implied, including the warranty against redhibitory defects, to the fullest extent permitted under Louisiana law.
[// GUIDANCE: Louisiana allows waiver of redhibition (hidden-defect) warranties if the waiver is clear and unambiguous.]
4. PURCHASE PRICE; EARNEST MONEY; ALLOCATION OF CONSIDERATION
4.1 Purchase Price. The total purchase price (the “Purchase Price”) shall be [PURCHASE PRICE AMOUNT IN WORDS] ($[NUMERICAL]), subject to adjustments at Closing as provided herein.
4.2 Deposit. Within [NUMBER] business days after the Effective Date, Buyer shall deposit [DEPOSIT AMOUNT] with Escrow Agent (the “Deposit”).
a. The Deposit shall be non-refundable except as expressly provided in Sections 5.5 (Title Objections), 6.4 (Failure of Conditions), 9.4 (Environmental Termination), or 10 (Seller Default).
b. The Deposit shall be credited against the Purchase Price at Closing.
4.3 Allocation of Consideration. For all tax and accounting purposes, the Parties shall allocate the Purchase Price among the Land, Improvements, personal property, and Intangibles in accordance with Section 1060 of the Internal Revenue Code and mutually agreed IRS Form 8594 allocations.
5. DUE DILIGENCE; TITLE AND SURVEY
5.1 Access; Investigations. During the Due Diligence Period, Buyer and its representatives may enter the Property at reasonable times on at least 24-hours’ prior notice to Seller to conduct inspections, appraisals, and studies, including a Phase I Environmental Site Assessment (“Phase I ESA”). Buyer shall carry not less than [INSURANCE LIMITS] in commercial general liability insurance naming Seller as additional insured.
5.2 Title Commitment and Survey.
a. Within [NUMBER] days after the Effective Date, Seller shall cause Title Company to deliver to Buyer a current title commitment (the “Title Commitment”) together with copies of all recorded exceptions.
b. Buyer may obtain an ALTA/NSPS land title survey of the Property (the “Survey”).
5.3 Title Objections. Buyer shall have until the later of (i) [NUMBER] days after receipt of the Title Commitment and Survey, or (ii) expiration of the Due Diligence Period (the “Title Review Period”) to deliver written notice of objections (“Title Objection Notice”).
a. Seller may elect to cure, at its sole cost, any Title Objections on or before Closing.
b. If Seller fails or elects not to cure, Buyer may (i) waive such objections, or (ii) terminate this Agreement and receive a refund of the Deposit.
5.4 Title Policy. At Closing, Seller shall cause Title Company to issue to Buyer an ALTA owner’s title insurance policy (the “Title Policy”) insuring fee simple title to the Property in the amount of the Purchase Price, subject only to the Permitted Exceptions.
5.5 Zoning Compliance. Seller shall obtain and deliver to Buyer, at least [NUMBER] days prior to Closing, a current zoning verification letter from the applicable governmental authority confirming that the current Improvements and the intended use by Buyer are in compliance with all zoning ordinances.
6. CLOSING CONDITIONS; CLOSING DELIVERABLES
6.1 Buyer’s Conditions Precedent. Buyer’s obligation to close is conditioned upon:
a. Accuracy of Seller’s representations and warranties as of Closing;
b. Seller’s performance of all covenants and obligations;
c. Issuance of the Title Policy;
d. Receipt and approval of the Phase I ESA and any additional environmental investigations requested by Buyer;
e. Receipt of all third-party consents, governmental approvals, and estoppel certificates for the Leases as listed on Schedule 6.1(e).
6.2 Seller’s Conditions Precedent. Seller’s obligation to close is conditioned upon:
a. Buyer’s delivery of the Purchase Price and all required Closing Deliverables;
b. Buyer’s representations and warranties being true and correct as of Closing;
c. Buyer’s performance of its covenants and obligations.
6.3 Closing Deliverables. At Closing:
a. Seller shall deliver:
i. An Act of Cash Sale before a Louisiana notary public and two witnesses (the “Deed”), validly transferring the Property to Buyer;
ii. Possession letter, keys, and access codes;
iii. FIRPTA affidavit;
iv. Bill of sale for personal property;
v. Assignment of Leases and Security Deposits;
vi. General assignment of Intangibles;
vii. Seller’s certificate of non-foreign status; and
viii. Such additional documents as Title Company may reasonably require.
b. Buyer shall deliver:
i. The Purchase Price (plus or minus prorations and adjustments) in immediately available funds;
ii. Counterpart signature pages for each Seller Closing Document;
iii. Evidence of authority and incumbency;
iv. Such additional documents as Title Company may reasonably require.
6.4 Failure of Conditions. If any condition precedent of a Party is not satisfied or waived as of Closing, such Party may (a) terminate this Agreement and receive the Deposit (if Buyer) or retain the Deposit (if Seller), or (b) waive the condition and proceed to Closing.
7. REPRESENTATIONS AND WARRANTIES
7.1 Seller’s Representations and Warranties. Seller represents and warrants to Buyer as of the Effective Date and again as of Closing that:
a. Authority. Seller is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute and perform this Agreement.
b. Title. Seller owns fee simple title to the Property, free and clear of all liens other than the Permitted Exceptions.
c. No Conflicts. Execution and delivery of this Agreement will not violate any agreement binding on Seller.
d. Litigation. Except as disclosed on Schedule 7.1(d), no litigation or governmental proceeding is pending or threatened against Seller or the Property.
e. Compliance with Laws. Seller has not received written notice of violation of any Applicable Law, including zoning or Environmental Laws, that remains uncured.
f. Environmental. Except as disclosed in the environmental reports listed on Schedule 7.1(f), Seller has no knowledge of the Release of Hazardous Substances on, under, or about the Property.
g. Leases. Schedule 7.1(g) is a true, correct, and complete rent roll for the Property.
h. Foreign Person. Seller is not a “foreign person” within the meaning of Section 1445 of the Internal Revenue Code.
7.2 Buyer’s Representations and Warranties. Buyer represents and warrants to Seller that:
a. Authority. Buyer is duly organized, validly existing, and in good standing under the laws of its state of formation and has full power and authority to execute and perform this Agreement.
b. Funds Available. Buyer has, or will have at Closing, sufficient funds to pay the Purchase Price and all Closing costs.
c. Sophistication. Buyer is a sophisticated purchaser of commercial real estate capable of evaluating the risks of this transaction.
7.3 Survival. Seller’s representations and warranties shall survive Closing for [SURVIVAL PERIOD, e.g., 12 months] (the “Survival Period”). Buyer must commence any claim for breach on or before expiration of the Survival Period.
8. COVENANTS OF THE PARTIES
8.1 Interim Operations. Between the Effective Date and 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 or Service Contract without Buyer’s prior written consent, except in the ordinary course;
c. Not create or permit any new lien or encumbrance on the Property;
d. Maintain all existing insurance coverage (or comparable replacement coverage).
8.2 Cooperation. Each Party shall cooperate with the other and Title Company to satisfy the Closing conditions, including execution of additional instruments reasonably necessary to consummate the transaction.
8.3 Confidentiality. The terms of this Agreement and all non-public information obtained in connection herewith shall be kept confidential, except as required by law or for customary disclosures to lenders, investors, or advisors who agree to be bound by confidentiality obligations.
9. ENVIRONMENTAL MATTERS AND INDEMNIFICATION
9.1 Environmental Review. Buyer may perform, at its sole cost, a Phase I ESA and, if recommended, a Phase II investigation. Seller shall reasonably cooperate, including execution of any access letters required by consultants.
9.2 Buyer’s Right to Terminate. If the Phase I ESA or any subsequent investigation reveals a Recognized Environmental Condition (“REC”) reasonably estimated to cost more than [THRESHOLD, e.g., $_____] to remediate, Buyer may, prior to expiration of the Due Diligence Period, terminate this Agreement by written notice and receive a refund of the Deposit.
9.3 Environmental Indemnity. From and after Closing, Seller shall indemnify, defend, and hold harmless Buyer and its Affiliates, and their respective officers, directors, shareholders, partners, members, employees, agents, successors, and assigns (collectively, the “Buyer Indemnitees”), from and against any and all claims, losses, liabilities, damages, costs, and expenses (including reasonable attorneys’ fees) (“Losses”) arising from:
a. The Release or presence of Hazardous Substances on, under, or about the Property prior to the Closing Date; or
b. Any violation of Environmental Laws relating to the Property prior to the Closing Date.
9.4 Procedure; Limitations.
a. Buyer shall promptly notify Seller of any claim for indemnification. Failure to give prompt notice shall not relieve Seller of its obligations except to the extent Seller is materially prejudiced.
b. [NEGOTIABLE LIABILITY CAP] Seller’s aggregate liability under this Section 9 shall not exceed [CAP AMOUNT OR “NO CAP”].
c. The indemnity shall survive Closing for a period of [ENVIRONMENTAL SURVIVAL PERIOD, e.g., 5 years].
10. DEFAULT; REMEDIES
10.1 Buyer Default. If Buyer fails to perform its obligations and such failure is not cured within [NUMBER] days after written notice, Seller may elect, as its sole and exclusive remedy, to terminate this Agreement and retain the Deposit as liquidated damages. The Parties acknowledge that actual damages would be difficult to ascertain and the Deposit represents a fair approximation of Seller’s damages.
10.2 Seller Default. If Seller fails to perform its obligations and such failure is not cured within [NUMBER] days after written notice, Buyer may elect either to:
a. Terminate this Agreement and receive an immediate refund of the Deposit plus reimbursement of its reasonable out-of-pocket third-party costs (not to exceed [CAP AMOUNT]); or
b. Seek specific performance of this Agreement (the Parties acknowledging that the Property is unique and monetary damages would be inadequate).
10.3 Attorneys’ Fees. The prevailing Party in any action or proceeding to enforce this Agreement shall be entitled to recover its reasonable attorneys’ fees and costs.
11. RISK ALLOCATION; LIMITATION OF LIABILITY
11.1 Risk of Loss. Risk of loss or damage to the Property by fire or other casualty shall remain with Seller until Closing. If any material casualty occurs prior to Closing, Buyer may (a) terminate this Agreement and receive the Deposit, or (b) proceed to Closing and receive any insurance proceeds (plus credit for the deductible).
11.2 Condemnation. If prior to Closing any portion of the Property is taken or threatened to be taken by eminent domain, Buyer may elect to terminate this Agreement and receive the Deposit, or proceed and receive the condemnation award.
11.3 Limitation of Liability. Except for Seller’s obligations under Section 9 (Environmental Indemnity), Seller’s and Buyer’s respective aggregate liability arising out of or in connection with this Agreement shall not exceed [NEGOTIABLE LIABILITY CAP].
[// GUIDANCE: Parties often select 10% of the Purchase Price, or a fixed dollar amount, as an overall cap.]
12. DISPUTE RESOLUTION
12.1 Governing Law. This Agreement shall be governed by and construed in accordance with the laws of the State of Louisiana, without regard to its conflict of law rules.
12.2 Forum Selection. Any action or proceeding arising out of or relating to this Agreement shall be brought exclusively in the state courts located in [PARISH, LA]. Each Party hereby submits to the jurisdiction of such courts.
12.3 Optional Arbitration. [OPTIONAL PROVISION – INSERT OR DELETE]
“If mutually elected in writing by the Parties within ten (10) days after the dispute arises, any dispute shall be resolved by binding arbitration administered by the American Arbitration Association under its Commercial Arbitration Rules, held in [CITY, LA], before a panel of three (3) arbitrators.”
12.4 Jury Trial Waiver. [OPTIONAL PROVISION – INSERT OR DELETE]
“EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT TO TRIAL BY JURY IN ANY ACTION RELATING TO THIS AGREEMENT.”
12.5 Specific Performance. Notwithstanding anything to the contrary, each Party acknowledges that the Property is unique and that the non-breaching Party may seek equitable relief, including specific performance and injunctive relief, in addition to, or in lieu of, any other remedy.
13. MISCELLANEOUS / GENERAL PROVISIONS
13.1 Notices. All notices must be in writing and delivered (a) by hand against receipt, (b) by reputable overnight courier, or (c) by email with confirming delivery receipt, to the addresses set forth below each Party’s signature.
13.2 Amendments; Waivers. This Agreement may be amended only by a written instrument executed by both Parties. No waiver shall be effective unless in writing and signed by the Party against whom the waiver is asserted.
13.3 Assignment. Buyer may not assign this Agreement without Seller’s prior written consent, except to an Affiliate of Buyer that is controlled by, controls, or is under common control with Buyer, provided Buyer remains liable for performance.
13.4 Successors and Assigns. Subject to Section 13.3, this Agreement shall bind and inure to the benefit of the Parties and their respective successors and permitted assigns.
13.5 Entire Agreement. This Agreement, together with the Exhibits and Schedules hereto, constitutes the entire agreement between the Parties with respect to the subject matter hereof and supersedes all prior understandings.
13.6 Severability. If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect, and the invalid provision shall be reformed to the minimum extent necessary to give effect to the Parties’ intent.
13.7 Counterparts; Electronic Signatures. This Agreement may be executed in multiple counterparts, each of which shall be deemed an original and all of which together constitute one instrument. Signatures delivered by electronic transmission (e.g., PDF or DocuSign) shall be deemed original signatures.
13.8 Time of Essence. Time is of the essence with respect to all dates and time periods set forth herein.
14. EXECUTION BLOCK
IN WITNESS WHEREOF, the Parties have executed this Commercial Agreement to Purchase and Sale as of the Effective Date.
SELLER:
[SELLER LEGAL NAME]
By: _____
Name: _____
Title: ____
Date: _______
Witness 1: ____
Witness 2: ____
BUYER:
[BUYER LEGAL NAME]
By: _____
Name: _____
Title: ____
Date: _______
Witness 1: ____
Witness 2: ____
NOTARY ACKNOWLEDGMENT
State of Louisiana
Parish of _______
On this ___ day of ____, 20__, before me, the undersigned Notary Public, personally came and appeared the above-named signatories who, being duly sworn, acknowledged that they executed the foregoing instrument for the purposes therein contained.
Notary Public
Name: _____
Notary ID / Bar Roll No.: ___
My Commission Expires: __
EXHIBIT LIST (Attach as Needed)
Exhibit A – Legal Description of the Land
Exhibit B – Form of Act of Cash Sale (Deed)
Exhibit C – Bill of Sale for Personal Property
Exhibit D – Assignment of Leases and Security Deposits
Exhibit E – Rent Roll
Exhibit F – Service Contracts
Exhibit G – Environmental Reports
Exhibit H – Form of Owner’s Affidavit
[// GUIDANCE: Verify parish-specific witness requirements and notarial form. Louisiana customarily requires two witnesses and a notary for authentic acts affecting immovable property.]