Farm and Agribusiness Purchase and Sale Transactions: Key Legal Issues for Buyers and Sellers

Purchasing an agribusiness--comprising commercial farming or ranching, processing, packing, manufacturing, and other livestock, dairy or agricultural-focused operations--is fraught with legal issues well beyond real estate matters to resolve during the due diligence period. Working knowledge of the concerns, standards, and customs for addressing those matters is critical to a successful transaction.

When representing buyers or sellers in an agribusiness transaction, attorneys must be prepared to address issues that cross multiple practice areas. Counsel must ensure that the purchase and sale agreement provides an optimal roadmap through the acquisition and disposition process that considers all stakeholders, meets the parties' reasonable expectations, and defines the buyer's due diligence work parameters.

Key provisions include the buyer's ability to obtain financing, terms of assumed financing, insurance availability, essential terms and conditions, the property and consideration that will change hands, and the buyer's due diligence inspection rights. The parties should clearly articulate the scope of the buyer's inspection activities, the timeline for the buyer to conduct inspection activities, and the post-inspection treatment of information discovered.

Other critical issues include deed restrictions, covenants, encroachments, easements and access, environmental contamination and compliance, water and mineral rights, utilities, leases or other contracts that run with the land, and other land use concerns.

Listen as our authoritative panel discusses unique issues involved in purchasing or selling a farm or other agribusiness. The discussion will include threshold considerations, key terms and closing contingencies in the purchase and sale agreement, and best practices for full due diligence.

I.  Identifying threshold considerations

II.  Negotiating and drafting the purchase and sale agreement

III. Key due diligence issues

A. Real property

B. Personal property

C. IP

D. Production history

E. Contracts, permits, licenses

F. Regulatory compliance

IV. Case studies

The panel will review these and other key issues:

• What considerations arise when the seller intends to retain certain operations?
• What are best practices for conducting a physical inspection of the property?
• How does one resolve issues with deed restrictions, covenants, easements, and encroachments?
• What are the requirements for adequate environmental due diligence?
• How can buyers confirm the protection of their water and mineral rights?
• What are the critical land use issues?
• What key factors impact the functionality and profitability of the agribusiness?
• Will the seller continue certain operations in a way that could compete with the buyer's business that the buyer may want to address by negotiating a noncompete agreement?
• What are the most common financial issues that can arise during the due diligence phase?
• How will the parties exchange information during the negotiation and due diligence period?