Buy/Sell Agreements

A buy/sell agreement is a contract usually entered into between business partners pursuant to which the surviving partners are bound to buy out the other partner’s interest in the business should a specific event occur. Specific events which may trigger a buy/sell agreement include death, divorce, long-term disability, retirement or bankruptcy.

The agreement is often linked to an insurance policy on each partner’s life. The policy provides the surviving partners with the money to be able to buy out the deceased/disabled/departing partner’s interest.