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If you’re in the throes of selling your business and a committed buyer expresses their intention to pull out of the sale, this can be understandably frustrating. It can have various consequences, both financially and operationally, on the future of the business and on you personally.
While the global economy has largely rebounded from the COVID‐19 era, market uncertainties in 2025 still mean that some buyers may get cold feet. Buyers might now be more cautious due to evolving regulatory frameworks, fluctuating trade conditions, or revised financial forecasts that impact long-term business viability.
In any event, this article explores your rights throughout the business sale process and outlines what you can do to enforce those rights.
The Stages Of The Sale
The stage reached in the sale largely informs the strength of your negotiating position and the next steps available to you. For a broader perspective on preparing your business for a successful sale, you might also want to check out our Business Set-Up: Ideas and Plans guide.
Below, we summarise the various stages of the business sale process, and how each phase affects your ability to compel the buyer to complete the transaction.
Stage 1: Expression Of Interest
What happens during this stage?
During the Expression of Interest stage, either the buyer approaches you with an interest in acquiring the business or you actively market the business – possibly through advertising or engaging a business broker. At this time, discussions are typically high level, focusing on the commercial terms of the prospective sale.
Seller’s position: low
At this early stage, your ability to force the sale is minimal because no formal agreement has been established yet.
Stage 2: Heads Of Agreement
What happens during this stage?
At this point, both parties usually agree on the key commercial terms of the sale – such as the purchase price, which assets are included, and any conditions that must be met before the sale can proceed. This can occur informally, via verbal or email agreement, or formally through a Heads of Agreement (HoA) – a short-form document setting out these terms. It is essential in 2025 to clearly mark whether the HoA is binding, as recent cases have highlighted the importance of enforceability.
Seller’s position: moderate
Your strength in compelling the buyer to complete the sale is moderate at this stage, largely depending on whether the HoA is legally binding and the specific terms agreed upon.
Stage 3: Due Diligence
What happens during this stage?
During the Due Diligence stage, the buyer undertakes a meticulous examination of the business, reviewing the financial records, legal standing, and ownership of assets. In 2025, buyers are also increasingly scrutinising areas such as IT security, environmental compliance, and workforce practices, in line with updated regulations. For more insight into efficient due diligence practices, our Regulatory Compliance guide offers valuable tips.
Seller’s position: moderate
Your position at this stage remains moderate. The extent to which a binding HoA is in place, and its specific provisions, will greatly influence your ability to insist on completing the sale.
Stage 4: Negotiating A Sale Agreement
What happens during this stage?
This phase involves ironing out the finer details of the sale. Typically, you will engage a lawyer to draft the Business Sale Agreement, which is then reviewed by the buyer’s legal team for any necessary revisions. In today’s climate, with digital contracting commonplace, ensure your agreement accommodates modern practices – for instance, by incorporating provisions for secure e-signature authentication. For guidance on digital execution, see our article on why you should use e-signatures.
Seller’s position: moderate
Your leverage during negotiations remains moderate; it is influenced by the terms of any preliminary agreements and the robustness of the legal framework established in the HoA.
Stage 5: Signing The Sale Agreement
What happens during this stage?
The parties formally sign the Business Sale Agreement, exchanging signed copies. If a deposit is required, it is typically paid at this point. With the increased acceptance of digital signatures in 2025, ensure that all e-signing procedures comply with current state regulations (learn more here).
Seller’s position: strong
At the signing phase, your position is very strong because the buyer has now committed formally to the transaction. However, note that many Business Sale Agreements include conditions precedent – typically, financing requirements – that might permit the buyer to withdraw if unmet.
Stage 6: Settlement & Completion
What happens during this stage?
At settlement, the balance of the purchase price is cleared (unless otherwise negotiated, such as in instalment arrangements) and the business is officially handed over to the buyer. Sale Agreements in 2025 may also include post-completion obligations – for example, requiring the seller to provide transitional training. Once settlement occurs, the buyer no longer has the discretion to back out, though post-completion warranties and indemnities could potentially allow for remedial action if issues arise.
The Terms Of The Agreements
The buyer’s ability to withdraw or be compelled to complete the transaction is heavily influenced by the terms set out in both the Heads of Agreement and the final Sale Agreement. In 2025, with many contractual frameworks updated to reflect digital transactions and modern dispute resolution practices, it is more critical than ever that these documents clearly impose obligations on each party.
Without an express commitment embedded in these agreements, a buyer might still be able to exit the deal with limited consequences. It is therefore essential to have key documents such as HoAs and Business Sale Agreements expertly drafted and reviewed. Our Company Set-Up and Contract Review services can help ensure that your agreements enforce the necessary obligations.
Your Options From Here
Negotiation
Depending on the circumstances, your first step might be to contact the buyer, clearly explain your position, and attempt to negotiate a mutually acceptable compromise. This approach is particularly advisable when your legal footing isn’t overly strong – for example, if only a non-binding HoA is in place.
Often, the buyer’s concerns can be alleviated by renegotiating terms such as a reduced purchase price, instalment-based payments, or a deferred settlement date. If an agreement is reached, the buyer may ask for a Deed of Release to limit their future liability. In such cases, it is prudent to consult a lawyer to fully understand the long-term implications of releasing any potential claims.
Sale Agreement Requirements
If a Sale Agreement is already in place, it will typically include dispute resolution clauses that dictate the steps to be followed should differences arise. For instance, the agreement might require:
- One party must formally notify the other of the dispute;
- The parties must meet and attempt to resolve the issue in good faith within 14 days of notice;
- If unresolved, the parties must attend mediation with a neutral third party within 21 days;
- If mediation fails, court proceedings may then be initiated.
In 2025, many agreements also address modern concerns by incorporating clauses related to digital transactions, which helps reduce ambiguities. You can explore our Service Agreement offerings to see how modern sale agreements are structured.
Pre-Litigation And Litigation
If you have exhausted all negotiation and mediation avenues with no resolution, you may need to adopt a more assertive legal strategy. The initial step is often to have a lawyer draft a letter of demand outlining your expectations – typically, the full payment of the agreed purchase price and the enforcement of the sale.
Should the buyer fail to comply with the demands, your next recourse might be to commence court proceedings by filing a Statement of Claim with the relevant court. Before initiating legal action, it is crucial to demonstrate that you are “ready, willing and able” to complete the sale – meaning all your obligations, including any conditions precedent, have been satisfied.
It’s important to bear in mind that litigation can be costly, stressful, and time-consuming. For support during disputes, our Negotiation Support service may provide valuable guidance in resolving conflicts before resorting to court.
Additionally, consider alternative dispute resolution (ADR) methods such as arbitration or virtual mediation, which have become more streamlined in 2025. These processes can help resolve disputes efficiently while minimising disruption to your business.
What To Take Away…
It’s clear that obtaining the right legal advice when selling a business is paramount to protecting your interests if a buyer decides to withdraw. Each stage of the sale-from the initial expression of interest to final settlement-carries its own risks and opportunities to enforce the sale.
Our experienced business sale team at Sprintlaw is here to advise you on your next steps if you encounter issues with a buyer, or to draft up your Sale Agreement in a manner that limits potential risks down the track. In today’s dynamic legal landscape, ensuring that all your documents are up-to-date and reflective of 2025 standards can make all the difference.
Contact our friendly team on 1800 730 617 or email team@sprintlaw.com.au for further information and a quote on how we can assist you. Our legal consultants are available for a free, no-obligation chat about your specific situation.
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