Can a purchase agreement require the buyer's own board or shareholders to approve it before it's binding?

Yes — a purchase agreement can make the buyer's own internal corporate approval, such as approval by its board of directors or, where relevant, its own shareholders, a formal closing condition, and this is common where the buyer is itself a corporation with governance requirements that need to be satisfied before it can lawfully commit to a major purchase. This mirrors, in a sense, requirements sellers face on the other side of larger transactions, where a sale of all or substantially all of a corporation's assets outside the ordinary course of business generally needs approval by special resolution of the selling corporation's own shareholders under corporate statutes like the Business Corporations Act or the Canada Business Corporations Act.

Making the buyer's own board approval an express closing condition is particularly relevant where the deal is being negotiated by management before the board has formally weighed in, or where the buyer's governing documents require board sign-off above a certain transaction size. Sellers should understand what this condition means practically — it can add real timing uncertainty if the buyer's board hasn't already indicated informal support before signing.

Confirming exactly what internal approvals each side actually needs, and building them into the conditions correctly, is worth doing with a Treadstone business lawyer as part of structuring the deal.