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 Massachusetts, an asset purchase agreement (APA) is a legal document that outlines the terms and conditions under which one party (the buyer) agrees to purchase assets from another party (the seller). The assets may include tangible property like equipment and inventory, as well as intangible assets such as trademarks and customer lists. APAs are distinct from merger agreements, where two companies combine to form a new entity, and acquisition agreements, where one company takes over another entirely, including its liabilities. The APA allows the buyer to acquire specific assets and avoid certain liabilities, making it a preferred method for buyers who wish to minimize risk. The agreement should detail the assets being purchased, the purchase price, and how the transfer of assets will occur. It should also address any liabilities that the buyer is willing to assume. The agreement is subject to Massachusetts state laws and, depending on the nature of the assets, may also be subject to federal regulations. It is advisable for parties involved in an APA to consult with an attorney to ensure that the agreement complies with all relevant laws and that their interests are adequately protected.