Closing deliverables: Overview, definition, and example
What are closing deliverables?
Closing deliverables refer to the specific tasks, documents, or items that must be completed, submitted, or delivered by the parties involved in a contract or transaction at the conclusion of the deal or project. These deliverables are usually required to formally close or finalize the agreement, ensuring that all terms have been met, and the transaction or project is successfully completed. In the context of business transactions, such as mergers and acquisitions, real estate deals, or service contracts, closing deliverables might include the transfer of documents, payment of agreed amounts, the finalization of legal agreements, and any other required actions to complete the deal.
For example, in a real estate transaction, the closing deliverables may include the transfer of the deed, payment of the purchase price, and the completion of title searches and insurance.
Why are closing deliverables important?
Closing deliverables are important because they ensure that all necessary steps are completed before a contract or transaction is considered final. These deliverables help confirm that the terms of the agreement have been met and that there are no outstanding obligations. By clearly outlining these requirements, both parties involved can avoid disputes or misunderstandings at the conclusion of the deal. Closing deliverables also serve as documentation for the transaction, providing a legal record that can be referred to in case of future questions or issues. In business deals, these deliverables help ensure a smooth, efficient closing process.
Understanding closing deliverables through an example
Let’s say a company is finalizing a sale of one of its subsidiaries. The closing deliverables may include documents such as the signed purchase agreement, the transfer of ownership documents, final payment, and any regulatory approvals or clearances required by law. Once these items are delivered and confirmed, the deal can be officially closed, and ownership of the subsidiary is transferred to the buyer.
In another example, in the case of a service contract, closing deliverables might include the completion of the final project report, the delivery of completed work to the client, and the receipt of final payment. Only after all these deliverables are met can the service provider consider the contract closed.
An example of a closing deliverables clause
Here’s how a closing deliverables clause might appear in a contract:
“The Parties agree that the following closing deliverables are required for the completion of this Agreement: (i) the transfer of all intellectual property rights to the Buyer; (ii) payment of the full purchase price by the Buyer; (iii) execution of all required regulatory documents; and (iv) delivery of all outstanding project reports by the Seller. The closing of this transaction will occur upon the successful completion of these deliverables.”
Conclusion
Closing deliverables are essential components in the final stages of any transaction or contract. By clearly outlining the tasks, documents, or actions that must be completed to finalize a deal, both parties can ensure that the agreement is properly closed, with all obligations met. These deliverables provide a clear, agreed-upon framework for completing the transaction and help prevent disputes or delays at the conclusion of the deal. Whether in real estate, business sales, or service contracts, closing deliverables play a key role in ensuring the successful and smooth completion of agreements.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.