What Exactly Are You Buying? The Importance of Precision
- 30 Jun 2026
- Commercial Disputes Buying & Selling Businesses
One of the most overlooked issues in business sales is defining exactly what is being sold.
While parties often assume that "the business" is self-explanatory, disputes frequently arise where the contract does not clearly identify the assets included in the sale.
In Southdown Holdings Pty Ltd v ACP Magazines Ltd (ACP Publishing Pty Ltd), intellectual property in a photographic library was found to form part of the goodwill and therefore had to be transferred. The case is a reminder that valuable intangible assets may be included in a sale even if not expressly listed.
Similarly, in Gledhill v Ticehurst (1981) 1 NSWLR 414, where a vendor operated two businesses from the same premises and the contract was silent, the Court held that both businesses were included in the sale. The outcome was determined not by intention, but by how the transaction was documented.
Restraint of trade provisions also require careful attention. In DXC Eclipse Pty Ltd v Wildsmith [2022] NSWSC 1330, a seven-year restraint failed to protect the purchaser because it related to business activities outside the goodwill actually purchased. The Court reinforced that restraints must be reasonable and directly connected to the interests being protected.
These cases highlight the importance of precision. A well-drafted contract should clearly identify all assets, liabilities, and obligations being transferred, and ensure that restraint provisions are aligned with the actual transaction.
At Maclarens, we work closely with clients to ensure there is no ambiguity—because clarity at the outset is the best defence against disputes later.
For professional legal advice, contact Maclarens Lawyers on (02) 9682 3777
