A bulk sale is a sale of goods by a business which engages in selling items out of inventory, often in liquidating or selling a business, and is governed by Article 6 of the Uniform Commercial Code (UCC) which deals with bulk sales. Article 6 has been adopted at least in part in all states. If the parties do not comply with the notification process for a bulk sale, creditors of the seller may obtain a declaration that the sale was invalid against the creditors and the creditors may take possession of the goods or obtain judgment for any proceeds the buyer received from a subsequent sale.
UCC Section 6-104 specifies the duties of the bulk sales buyer, including determining the identity of the seller, and preparation of a list of claimants and a schedule of distribution. These duties are imposed on the buyer in order to give claimants the opportunity to learn of the bulk sale before the seller has been paid and disappeared with the money.
Idaho Provision in Bulk Sales Agreement Regarding Information to be Supplied by Seller The Idaho provision in a bulk sales agreement regarding information to be supplied by the seller is an essential component of the sales contract that ensures transparency and protection for all parties involved. It outlines the specific details and documents the seller must disclose to the buyer before the completion of the sale. This provision is designed to prevent fraudulent transactions, as it requires the seller to provide comprehensive information about their business, assets, liabilities, and potential risks associated with the purchase. The following are the key types of Idaho provisions commonly included in a bulk sales agreement: 1. Financial Statements: The seller is required to provide audited financial statements for a specified period, typically the last three years. These statements should include balance sheets, income statements, and cash flow statements. This information helps the buyer assess the financial health of the business and determine its potential profitability. 2. List of Assets: The seller must furnish a detailed list of all assets involved in the sale, including real estate, equipment, inventory, intellectual property rights, and any other relevant tangible or intangible assets. This ensures that the buyer is aware of the assets they are acquiring and can evaluate their value and condition. 3. Accounts Receivable and Payable: The provision also compels the seller to provide a comprehensive list of accounts receivable and payable. This allows the buyer to assess the seller's outstanding debts, potential receivables, and any potential risks associated with future payments. 4. Contracts and Agreements: The seller should disclose all contracts, leases, and agreements related to the business, including but not limited to customer contracts, vendor agreements, licensing agreements, employment contracts, and any other legally binding documents. This information helps the buyer understand existing obligations and potential risks or opportunities associated with these contracts. 5. Licenses and Permits: If the business requires specific licenses or permits operating legally, the seller must disclose all relevant permits and licenses they hold. This enables the buyer to ensure legal compliance and understand any contingencies regarding the transfer of these permits. 6. Litigation and Legal Issues: The seller must disclose any ongoing or pending litigation, disputes, or legal issues involving the business. This information allows the buyer to assess potential liabilities and any associated risks. 7. Tax Information: The provision may also require the seller to provide comprehensive tax records, including tax returns, unpaid taxes, tax assessments, and any existing or potential tax liabilities. This ensures that the buyer is aware of the business's tax situation and can make informed financial decisions. Overall, the Idaho provision in a bulk sales agreement lays out a comprehensive framework that promotes transparency and safeguards the buyer's interests. By mandating the disclosure of crucial information, it minimizes the risk of deceitful practices, helps buyers make informed decisions, and protects both parties involved in the transaction.
