An asset purchase agreement is a contract in which a buyer (person or entity) agrees to purchase assets from the seller (a person or entity) for a stated price. Asset purchase agreements are usually used when one business wants to purchase some but not all of the assets of another business, and when the buyer might be concerned about taking on liabilities associated with the selling company. These are a couple of ways in which an asset purchase agreement is different from a merger agreement in which two or more companies merge to create a new combined organization, or an acquisition agreement in which the buying company acquires the selling company in its entirety.

In Hawaii, an asset purchase agreement (APA) is a legal document that outlines the terms and conditions under which one party, the buyer, agrees to purchase specific assets from another party, the seller. Unlike a merger or acquisition agreement, an APA does not involve the transfer of ownership of the entire company, but rather the transfer of selected assets, which may include tangible assets like equipment and inventory, and intangible assets like intellectual property and goodwill. The APA allows the buyer to avoid assuming the seller's liabilities unless expressly assumed in the agreement. The specifics of an APA are governed by Hawaii's Uniform Commercial Code (UCC) and other relevant state laws, which dictate the necessary formalities for the sale of certain types of assets, such as real estate or business entities. Additionally, federal law may apply, particularly in areas such as tax implications and antitrust considerations. It is important for both parties to conduct thorough due diligence and to clearly specify which assets and liabilities are being transferred to ensure a clear understanding and to avoid future disputes.