When buying or selling a business, it pays to read the fine print. In Queensland, parties often use a standard form contract prepared by the Real Estate Institute of Queensland (REIQ). However, no contract is “one size fits all”. In this article we consider some of the special conditions parties should consider.

Does the buyer require due diligence?

By default, the REIQ contract only gives the buyer a limited right to inspect the financial books and records of the business, and to terminate if they are not substantially true and correct. We recommend that buyers request a due diligence period of at least 30 days as a special condition. This gives them the opportunity to inspect and satisfy themselves about the records and financial performance of the business, as well as any other enquiries they wish to undertake.

Is there a lease?

Where the business operates from leased premises, details of the lease should be included. The contract will need to be conditional upon either the landlord granting a new lease or consenting to an assignment of the existing lease. This is generally dealt with in the REIQ standard conditions. However, it can be beneficial to include a special condition to confirm which party is responsible for paying the landlord’s costs (if the landlord is permitted to claim these from the tenant). Given that landlord’s consent is sometimes delayed, the parties should also consider whether there should be a right to extend settlement if consent has not been received yet due to no fault of the parties.

Is the business a franchise?

If the business is a franchise, the franchisor will need to consent to the transaction. This should be noted in a special condition which makes the sale conditional upon the franchisor consenting and issuing a new franchise agreement to the buyer. That clause should also clarify which party is responsible for paying the franchisor’s costs for this process.

Are there any food or liquor licences?

If the business is a food business or intends to sell alcohol, special conditions will need to be added, making the contract conditional upon these licences being either transferred (if possible) or the buyer obtaining a new licence. The condition should also require the parties to provide information and documents as soon as possible so as to not delay this process.


By default, the REIQ contract includes a number of warranties from the seller, including that:

  • it is the owner of the business and the assets;
  • plant and equipment will be at completion in good working order, save for fair wear and tear; and
  • the seller is not insolvent or bankrupt.

As special conditions, a buyer may wish to ask for additional warranties, such as in relation to ownership of intellectual property, that the buyer has complied with all applicable laws, and that all financial and business records have been properly kept.

A seller may wish to consider limitations to the warranties, such as minimum amounts before the buyer can claim, as well as a warranty period.

What next?

There are many considerations when buying or selling a business in Queensland. If you’re considering buying or selling a business of any size, Rouse Lawyers is here to assist. Our experienced commercial team can help with all aspects of purchasing a business, from preparing or reviewing a contract to settlement.


The information contained on this website is for general guidance on matters of interest only. The application and impact of laws can vary widely based on the specific facts involved.

Accordingly, the information on this site is provided with the understanding that the authors and publishers are not providing legal advice. As such, it should not be used as a substitute for consultation with professional legal advisers. Before making any decision or taking any action, you should consult with a professional lawyer from Rouse Lawyers.

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