Santa Fe, NM asked in Mergers & Acquisitions for New Mexico

Q: If you acquire a company are you required to honor all of the current owner's existing vendor contracts?

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2 Lawyer Answers

Gary William Boyle

  • Santa Fe, NM
  • Licensed in New Mexico

A: If you buy the stock of the company, the vendor contracts will continue to be contracts of the company you purchased and will be in force according to their terms. If you buy the assets of the company, the vendor contracts will remain with the seller and you would be free to deal with vendors as you please. Of course, there are many other considerations to take into account when deciding whether to purchase stock or assets.

Jonathan R. Roth


A: If you buy the stock of a corporation (or membership interest if it is an LLC), then you take all its assets and obligations as of the time of purchase. If you buy the assets of a corporation you can choose what assets and liabilities/obligations you assume. The Agreement should specify what assets and obligations you are buying in an asset purchase and sale, if you are buying the corporation stock, then you are stuck with existing contracts.

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