What closing conditions are typical in an Ontario business purchase?

Closing conditions in an Ontario business purchase agreement are requirements that must be satisfied before the parties are obligated to complete the transaction. If a condition is not met (and not waived), the deal does not close and the parties are typically entitled to walk away.

Common conditions include: satisfactory completion of due diligence, receipt of required third-party consents (e.g., landlord consent to assign a lease, lender consent where a change of control triggers debt obligations), government approvals (if the transaction is large enough to require Competition Act review), and the absence of material adverse change in the business since signing.

Conditions can be mutual (both sides must be satisfied), or they can be for one party's sole benefit — in which case that party can waive the condition and close anyway. The party whose condition it is generally has the right to determine whether it is satisfied, subject to a good faith or reasonableness standard.

Managing conditions and the timeline for satisfying them is one of the most important practical tasks between signing and closing a business transaction in Ontario.