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 Tennessee, 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 selling company itself, but rather the transfer of its individual assets, which may include tangible assets like equipment and inventory, and intangible assets like intellectual property and customer lists. The APA allows the buyer to selectively acquire assets and avoid assuming certain liabilities of the seller. The agreement typically details the assets being purchased, the purchase price, representations and warranties, conditions to closing, and provisions for handling liabilities. It is important for both parties to conduct due diligence and often seek the advice of an attorney to ensure that the agreement meets all legal requirements and adequately protects their interests. Tennessee law will govern the interpretation, validity, and enforcement of an APA executed within the state, and any disputes arising from the agreement would typically be resolved in accordance with state law and in Tennessee courts.