Series 79 practice questionhardStock vs Asset Purchases
In the context of asset purchases, what is the primary challenge regarding the assignment of third-party contracts?
- AAll contracts transfer automatically to the buyer upon closing
- BConsents from counterparties are often required to assign contracts to the buyer✓ Correct answer
- CThe seller can assign contracts without restriction
- DThe buyer bears no risk if a contract is terminated
Explanation
Why B — Consents from counterparties are often required to assign contracts to the buyer
In asset purchases, many contracts contain anti-assignment provisions requiring counterparty consent. Overlooking this risk can lead to unexpected loss of key agreements post-closing.
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