A bulk sale is a sale of goods by a business which engages in selling items out of inventory, often in liquidating or selling a business, and is governed by Article 6 of the Uniform Commercial Code (UCC) which deals with bulk sales. Article 6 has been adopted at least in part in all states. If the parties do not comply with the notification process for a bulk sale, creditors of the seller may obtain a declaration that the sale was invalid against the creditors and the creditors may take possession of the goods or obtain judgment for any proceeds the buyer received from a subsequent sale.
UCC Section 6-104 specifies the duties of the bulk sales buyer, including determining the identity of the seller, and preparation of a list of claimants and a schedule of distribution. These duties are imposed on the buyer in order to give claimants the opportunity to learn of the bulk sale before the seller has been paid and disappeared with the money.
The Maryland Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller is a crucial clause that outlines specific requirements imposed by the state of Maryland on sellers involved in bulk sales transactions. These provisions aim to ensure transparency and protect the rights of buyers. One type of Maryland Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller pertains to the comprehensive disclosure of the seller's financial records. This includes providing a detailed breakdown of assets and liabilities, profit and loss statements, tax returns, and any other relevant financial documentation. This information helps the buyer assess the financial health of the business being sold and make informed decisions. Another type of Maryland Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller focuses on the seller's obligations related to outstanding taxes and debts. Sellers must disclose any pending or potential tax liabilities, government claims, judgments, liens, or lawsuits against the business. This provision ensures that buyers are aware of any existing financial encumbrances and can take necessary steps to protect themselves from assuming these liabilities. Furthermore, the Maryland Provision may require sellers to provide information regarding any contracts or agreements affecting the business being sold. This includes leases, licenses, permits, warranties, or any other arrangements that may impact the buyer's operation or profitability. The seller must disclose the terms and conditions of these agreements, allowing the buyer to assess their implications and make informed decisions. Additionally, the Maryland Provision may mandate the seller to provide details regarding the location, nature, and condition of the business premises, assets, and inventory. This information ensures that the buyer understands the physical assets included in the sale and their current state. It also helps the buyer assess any potential risks or limitations associated with the premises or assets. Overall, the Maryland Provision in a Bulk Sales Agreement Regarding Information to be Supplied by Seller is designed to protect buyers from hidden liabilities and provide them with comprehensive information necessary for making informed decisions. By imposing these requirements, Maryland aims to foster fair and transparent business transactions within its jurisdiction.
