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 Utah Provision in a bulk sales agreement regarding information to be supplied by the seller is a legal requirement that ensures transparency and protection for both parties involved in a bulk sale transaction. It defines the specific information that the seller must provide to the buyer before the sale can be completed. The Utah Provision typically includes the following key information to be supplied by the seller: 1. Seller Information: The seller must provide their legal name, address, contact details, and any other relevant information that identifies them as the owner of the goods being sold. 2. Asset Description: A detailed description of the assets being sold, including their quantity, condition, quality, specifications, and any other relevant details that help the buyer understand the nature of the assets. 3. Liabilities: The seller must disclose any existing liabilities or outstanding debts associated with the assets being sold, such as mortgages, liens, or other encumbrances. This allows the buyer to assess the potential risks involved in the purchase. 4. Financial Statements: The seller may be required to provide financial statements, such as income statements, balance sheets, and cash flow statements, to demonstrate the financial health of the business and its assets. 5. Contracts and Agreements: Any contracts, agreements, licenses, or permits related to the assets being sold should be disclosed. This includes lease agreements, supplier contracts, warranties, and intellectual property rights. 6. Pending Litigation: If there are any pending litigation, lawsuits, or claims against the seller or the assets being sold, the seller must disclose this information to the buyer. It helps the buyer assess potential legal risks and liabilities. 7. Taxes and Governmental Obligations: The seller should provide information about any outstanding tax liabilities or obligations to government agencies. This includes income taxes, sales taxes, property taxes, and any other taxes associated with the assets. Different types of Utah Provision in Bulk Sales Agreement Regarding Information to be Supplied by Seller may include variations in the specific details required or additional requirements specific to certain industries or asset types. Examples could include Utah Provision for real estate transactions, Utah Provision for vehicle sales, or Utah Provision for business acquisitions. These variations usually entail tailoring the disclosure requirements to match the nature of the assets being sold. It is important to consult with legal professionals or refer to specific Utah state statutes when drafting or reviewing a bulk sales agreement to ensure compliance with the applicable laws and to address all necessary information to be supplied by the seller.
