PLANT AND MACHINERY IN ACQUISITION
A schedule of the items of plant and machinery which are part of the sale is usually attached to the acquisition agreement. A buyer who wishes to purchase all of the assets needed to run the business may seek to safeguard itself by providing that plant and machinery ‘used in the business’ are to be transferred, including but not limited to those items listed in the schedule. Thus items forgotten or omitted from the schedule by will stillbe included in the sale.
Insure the plant and machinery
The buyer will normally assume risk on the plant and machinery when the acquisition agreement is executed and should get insurance cover from this date, even if completion is delayed.
As a buyer you should ask to include the following warranties as to the condition of the items of plant and machinery:
(a) they are in a proper state of repair and condition and in satisfactory working order;
(b) they have been properly and regularly maintained
(c) they are adequate for (and not surplus to) the need of the business.
(d) they are not dangerous, obsolete or in need of replacement;
The seller should be careful before agreeing to these warranties and try to restrict any liability to major defects.