- Disagreements after closing commonly arise from a few recurring sources: - Working capital or closing-statement adjustments — the actual level of receivables, inventory, payables, or…
- Re-read the purchase agreement's adjustment mechanism first.
- Which route applies is entirely a matter of what the specific purchase agreement says — there is no default rule that applies automatically across every deal.
Closing day feels like the finish line, but for many Ontario business sales the price is not truly final until weeks or months later, once a post-closing statement is prepared and compared against the closing estimate. When that statement lands and one side thinks the numbers are wrong, the deal is not over — it moves into a dispute process that the purchase agreement itself usually spells out.
Knowing that process before a disagreement happens, rather than scrambling to find it in the fine print afterward, puts you in a far stronger position whether you are the one owed money or the one being asked to pay it.
What Post-Closing Adjustments Typically Cover
Disagreements after closing commonly arise from a few recurring sources:
- Working capital or closing-statement adjustments — the actual level of receivables, inventory, payables, or cash differs from what was estimated at closing.
- Earn-out calculations — where part of the price depends on the business's performance after closing, and the parties disagree on how that performance was measured.
- Indemnity claims — the buyer alleges the seller breached a representation or warranty and seeks compensation, separate from (but sometimes overlapping with) a price adjustment dispute.
Purchase agreements usually address these categories differently, so the first step in any dispute is identifying which bucket the disagreement actually falls into.
Step-by-Step: What to Do When You Disagree
- Re-read the purchase agreement's adjustment mechanism first. Before raising the issue with the other side, confirm exactly what process the agreement requires — many set a strict deadline for objecting to a closing statement, and missing it can mean losing the right to dispute at all.
- Prepare a written, itemized objection. Vague dissatisfaction rarely gets anywhere. Identify the specific line items you dispute, the amount involved, and the accounting basis for your position.
- Exchange supporting documentation. Both sides typically have a right to review the underlying books and records behind the disputed statement. Requesting this early avoids delay later.
- Attempt direct negotiation within any agreed window. Many agreements give the parties a set period to resolve disagreements between themselves before any formal mechanism is triggered.
- Refer unresolved financial disputes to an independent accountant, if the agreement provides for it. This is a very common mechanism for working capital and closing-statement disputes specifically — the accountant's determination is often made final and binding by the agreement's own terms.
- Escalate other disputes as the agreement directs. Indemnity claims, earn-out disagreements, or issues the independent-accountant process doesn't cover may fall to arbitration or litigation instead, depending on what the parties agreed to.
Independent Accountant vs. Arbitration vs. Litigation
| Route | Typically used for | What to expect |
|---|---|---|
| Independent accountant referral | Working capital / closing-statement disagreements | A neutral accounting professional reviews the disputed figures and issues a determination; agreements often make this binding and limit further appeal |
| Arbitration | Disputes the agreement specifically routes there, or broader disagreements not resolved by an accountant | A private process outside the courts, generally faster and more confidential than litigation, governed by whatever arbitration clause the agreement contains |
| Litigation | Disputes with no other mechanism specified, or claims outside the scope of the pricing mechanism | Court proceedings, generally the slowest and most public route, but sometimes the only option depending on the agreement's wording |
Which route applies is entirely a matter of what the specific purchase agreement says — there is no default rule that applies automatically across every deal.
What to Gather Before You Raise a Dispute
- [ ] A copy of the fully executed purchase agreement, including any schedules defining the adjustment mechanism
- [ ] The estimated closing statement and the final (disputed) closing statement, side by side
- [ ] Underlying accounting records supporting your position on the disputed line items
- [ ] Correspondence with the other side or their accountants about the disputed figures
- [ ] Any deadlines the agreement imposes for objecting, responding, or escalating
Frequently asked questions
How long do I have to dispute a closing statement?
It depends entirely on your purchase agreement — many set a specific objection window, sometimes running from the date the statement was delivered. There is no general legal deadline that applies outside of what your agreement says, so check it immediately rather than assuming you have unlimited time.
Is the independent accountant's decision final?
Often, yes — many agreements state that the accountant's determination is final and binding on the parties, with limited or no right of further appeal. The exact wording of your agreement controls this, so it needs to be reviewed before you rely on any assumption either way.
Can I dispute an adjustment after I've already accepted payment?
This depends heavily on the wording of your agreement and the circumstances. Accepting payment without reservation can sometimes be treated as accepting the underlying calculation, so raise any objection in writing before, not after, accepting or making payment.
What if the other side simply refuses to engage?
If direct negotiation fails and the agreement's formal mechanism (accountant referral, arbitration, or litigation) is ignored or refused, you generally need to enforce the agreement's own dispute process — this is exactly the kind of situation where getting a lawyer involved early prevents a bigger problem later.
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