What terms does New Brunswick law imply into a business sale agreement, and what must be in writing?

When a business changes hands in New Brunswick, the purchase agreement sits on top of a few provincial statutes. This page covers New Brunswick only; for a neighbouring example, see what terms British Columbia law implies. The Sale of Goods Act defines goods to include all chattels personal other than things in action or money, so it speaks to items such as inventory and equipment. Whether a share sale is touched by it is a question for your lawyer.

How a contract of sale is made

Section 9(1) says that, subject to the Act and any statute on the subject, a contract of sale may be made in writing, with or without seal, orally, partly in writing and partly orally, or may be implied from the conduct of the parties. The words “any statute on the subject” matter. They mean another law can still add a requirement. This page does not say which other New Brunswick laws do, so ask a New Brunswick lawyer which documents in your deal, such as a lease assignment or a guarantee, need signed writing.

Implied terms and how to change them

Section 18 says that in a contract of sale, unless the circumstances of the contract show a different intention, there is an implied condition that the seller has a right to sell the goods, plus warranties of quiet possession and freedom from charges or encumbrances not declared or known to the buyer. Section 20 says that, subject to the Act and any statute on the subject, there is no implied warranty or condition as to quality or fitness except as listed. Merchantable quality applies to goods bought by description from a seller who deals in them, but if the buyer has examined the goods there is no implied condition as to defects the examination ought to have revealed. Under section 71, a right, duty or liability that would arise by implication of law may be negated or varied by express agreement, by the course of dealing, or by usage that binds both parties.

Signing electronically

The Electronic Transactions Act, section 10(1), says a legal requirement for the signature of a person is satisfied by an electronic signature. Under section 4(2), the Act does not apply to any Act, legal requirement, information, transaction or other matter that is excluded by regulation. Section 4(1) says another Act that expressly authorizes, prohibits or regulates the use of electronic information prevails in a conflict, and section 3 says nothing in the Act requires a person to use or accept electronic information. Confirm with your lawyer that the documents in your deal are not excluded. If the seller is a corporation selling all or substantially all of its property outside the ordinary course of business, the Business Corporations Act section 130(1) requires shareholder approval under its subsections (3) to (7), subject to the exceptions in subsection 130(1.1), which include a transaction that creates only a security interest, some leases, and some sales, leases or exchanges within a wholly owned corporate group or to an individual who holds all the shares of the corporation or of a body corporate that holds all of them.