Proceedings satisfactory: Overview, definition, and example
What does "proceedings satisfactory" mean?
"Proceedings satisfactory" refers to the condition that certain actions, events, or steps in a legal, business, or contractual process meet the required standards or conditions set forth in an agreement. When a party states that the "proceedings are satisfactory," it typically means that all necessary procedures, approvals, inspections, or actions have been carried out successfully and to the expected level of compliance or satisfaction.
In contracts or business transactions, the term is often used to indicate that certain prerequisites or steps—such as legal filings, regulatory approvals, or completion of necessary due diligence—have been fulfilled adequately. It is common in merger and acquisition agreements, real estate transactions, or any situation where a series of actions must be completed before finalizing the deal.
Why is "proceedings satisfactory" important?
"Proceedings satisfactory" is important because it sets a benchmark for what is considered acceptable completion or progress in a transaction or legal process. It ensures that both parties agree that all necessary steps have been completed properly before moving forward with the transaction. For businesses, ensuring that proceedings are satisfactory helps reduce risks and ensures compliance with the agreed terms, ultimately leading to smoother and more predictable outcomes.
For example, in mergers or acquisitions, if the proceedings are not satisfactory—such as failing to secure regulatory approval or not meeting due diligence standards—the deal could be delayed or even canceled. This clause is a safeguard to ensure that key milestones or requirements are met before the deal is finalized.
Understanding "proceedings satisfactory" through an example
Imagine you are purchasing a property. In the purchase agreement, there’s a clause that states the transaction will only proceed if the "proceedings are satisfactory," meaning that all necessary steps—such as securing financing, conducting a property inspection, and obtaining legal approvals—are completed successfully. If, during the "proceedings," an issue arises with the property title, or the inspection reveals significant problems, the proceedings would not be considered satisfactory, and you may choose not to proceed with the purchase or seek a renegotiation.
In another example, a company is acquiring another business. The acquisition agreement includes a provision stating that the deal is contingent upon the "proceedings being satisfactory," meaning that all legal and financial reviews, regulatory approvals, and negotiations must be completed successfully. If the due diligence process uncovers unexpected liabilities or the company fails to secure necessary permits, the proceedings would not be satisfactory, and the acquisition could be delayed or canceled.
Example of a "proceedings satisfactory" clause
Here’s an example of what a "proceedings satisfactory" clause might look like in a contract:
“The completion of the transaction is subject to the satisfaction of the Buyer that all proceedings, including but not limited to due diligence, regulatory approvals, and legal reviews, have been satisfactorily completed. The Buyer shall have the right to terminate the Agreement if any proceeding is deemed unsatisfactory, and no further obligations shall be owed by either Party.”
Conclusion
"Proceedings satisfactory" is a critical term in business and legal agreements, ensuring that all necessary steps, approvals, and conditions are met to a satisfactory level before a transaction or action is finalized. This term helps to protect both parties by providing clear criteria for what constitutes successful completion of necessary actions and prevents the continuation of a deal if key requirements are not met. Whether in real estate, mergers, acquisitions, or other contractual arrangements, ensuring that proceedings are satisfactory is essential for smooth and legally sound transactions.
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.