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 Virginia, 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 and acquisition agreements in that they do not involve the purchase of the seller's entire business entity, but rather specific assets, thereby allowing the buyer to avoid assuming the seller's liabilities unless expressly agreed upon. The agreement should detail the assets being purchased, the purchase price, and any representations and warranties. It is subject to Virginia's contract laws and the Uniform Commercial Code (UCC) as adopted in Virginia, which governs the sale of goods. Due diligence is a critical component of these transactions, and both parties often engage attorneys to navigate the complexities of the agreement to ensure that the terms are clear, the transaction is structured effectively, and to mitigate potential legal risks.