Two drafting architectures set what you assume.

An asset purchase agreement does one of two things. It lists the liabilities you assume and assumes nothing else, or it assumes everything arising from the business except a stated excluded list. The first leaves surprises with the seller. The second produces an argument about whether the surprise was excluded. Neither version binds a creditor who never signed it.

What are the two ways an asset purchase agreement can define assumed liabilities?

The two drafting architectures are enumeration and exclusion. Enumeration states a closed list of assumed liabilities, and anything off the list stays with the seller. Exclusion assumes all liabilities arising from the business, then carves out named categories. The choice is not stylistic. It allocates every liability nobody found in diligence.

Enumeration is the buyer-favorable architecture at this deal size. You have known the company ninety days; the seller has run it twenty years. A closed list puts the cost of that gap on the person who created it.

Neither architecture is safe when drafted lazily. An enumerated list ending in “and all other liabilities of the Business” is an exclusion agreement wearing a list’s clothing. Read the last clause.

What happens when a liability nobody listed shows up after closing?

A liability nobody listed is the test case for the architecture. Assume a sales and use tax assessment arrives after closing for pre-closing periods. Under an enumerated list it is off the list, so as between you and the seller it stays with the seller. Under an exclusion structure, the fight is whether taxes were excluded broadly enough.

The architecture decides who ultimately pays. It does not decide who gets the assessment, because several states put the seller’s sales tax on the purchaser by statute.

Therefore, enumerate, and exclude expressly any tax imposed on the buyer by reason of the seller’s pre-closing operations. Write the bridge, not just the category.

Law: N.Y. Tax Law sec. 1141(c) (Form AU-196.10, registered or certified mail, at least ten days before payment or possession, whichever is first, plus withholding; a non-complying purchaser is personally liable, capped at the price or fair market value). Cal. Rev. and Tax. Code secs. 6811-6812 (withhold until a receipt or certificate issues; liability capped at the price).

How should assumed liabilities match the assets you are buying?

The pairing rule is that liabilities follow the assets they belong to. If accounts receivable transfer to you, trade payables of the same cycle are a candidate for assumption. If customer contracts transfer, you assume performance after closing and exclude pre-closing breaches. An asset schedule and a liability schedule that do not correspond produce a purchase price nobody can defend.

• Receivables in, payables considered. You cannot collect on a finished job and leave the vendor invoice with a seller who has no cash.
• Contracts in, post-closing obligations only. Assignment moves the contract, not the seller’s history under it.
• Equipment in, the lease considered. What you take is the lease: remaining term, buyout, consent.
• Employees hired, accrued payroll decided in writing. Hiring the workforce is not assuming what the seller owes them.

Pre-closing breach is the clause people skip. If the seller shipped late for six months, the grievance belongs to the seller’s conduct, and the exclusions should say so. The customer can still sue you and still argue setoff against the contract you hold. The exclusion buys a basis to push the cost back, not immunity.

An assumed-liabilities article that does not mirror the asset schedule is not a perimeter. It is two documents describing different deals.

Which assumed liabilities do first-time buyers miss?

Eight categories deserve a direct question before signing: accrued paid time off, accrued payroll and payroll taxes, sales and use tax, warranty and product claims, pending litigation, deferred revenue and customer deposits, equipment and capital leases, and pre-closing income taxes. Each one is cash. Each one is cheap to negotiate before signing and expensive afterward.

Pre-closing income taxes deserve their own rule. Do not assume them, and do not let a general tax reference swallow them. An asset buyer who has not agreed to pay the seller’s income taxes is not ordinarily the taxpayer for them. Transferee liability is the exception, and it comes from state fraudulent transfer law, not your agreement.

Law: 26 U.S.C. sec. 6901 (a collection mechanism creating no liability itself); IRS Internal Revenue Manual 4.11.52 (substantive liability arises under state fraudulent transfer statutes or 28 U.S.C. secs. 3301-3308; the Manual is guidance, not law).

I read the excluded-liabilities definition first, then the assumed list, then the sweep. I ask for the payroll register and the accrual report before I mark up either.

Which two provisions in the assumed-liabilities article do the real work?

Two provisions carry the perimeter. The first is a sweep: a sentence stating that the buyer assumes only the liabilities identified in the assumed-liabilities section and no others, whether known or unknown, accrued or contingent, matured or unmatured. The second is an excluded-liabilities definition written affirmatively, naming categories rather than leaving them to be inferred.

The sweep closes the gap between the schedule and the world. Without it, silence means context. With it, silence means exclusion.

The affirmative list names the fights you expect: scheduled litigation, pre-closing taxes, product claims on units made before closing, pre-closing employment claims, contracts not assigned to you, indebtedness, and the seller’s own breach. Courts generally enforce an unambiguous allocation between the parties who signed it. None of it binds a claimant who did not sign, and none displaces a liability a statute puts on you.

Can excluded liabilities stop a creditor or a claimant from suing you?

An excluded-liabilities clause binds the seller, not a creditor. It is a contract between two parties, and a third party who never signed it is not limited by it. A customer injured by a unit the seller built, a tax agency, or an unpaid vendor can still name you as a defendant.

The general rule still favors you. A purchaser of assets does not inherit the seller’s debts simply by buying them. Courts recognize a short set of exceptions: express or implied assumption, a merger in substance, a mere continuation of the seller, and a transaction done to escape liability. Delaware reads de facto merger narrowly, looking for substantially all assets, continuity of ownership through stock consideration, and an assumption of liabilities. The exceptions are not applied uniformly, and the forum applies its own choice-of-law rules.

Law: Ross v. DESA Holdings Corp., 2008 WL 4899226 (Del. Super. Ct. Sept. 30, 2008) (bankruptcy sale order). Magnolia’s at Bethany, LLC v. Artesian Consulting Engineers, Inc., 2011 WL 4826106 (Del. Super. Ct. Sept. 19, 2011). Delaware trial decisions.

Statutes override that rule in places. Several states make a purchaser of business assets personally liable for the seller’s unpaid sales tax unless the purchaser notifies the tax authority in advance and withholds from the price. New York ties its ten-day deadline to the earlier of payment and possession; California requires withholding until a receipt or certificate issues. Deadlines, forms and caps differ by state.

Where a liability travels by operation of law, your exclusion does not stop the claim. It only decides who ultimately pays, and only while the seller can pay anything at all.

What makes an indemnity for excluded liabilities actually collectible?

An indemnity for excluded liabilities is worth what the seller is worth when the claim lands. Collectibility comes from structure negotiated before signing: a holdback the lender will allow, a seller note whose terms address set-off, a covenant that the selling entity stay in existence, and, if available, the owners’ signatures.

• Holdback or escrow, if the lender permits one. Treat this as a question. The lender financing the purchase has its own position on what may be held back and for how long, and an indemnity escrow is not standard equipment at this size.
• Seller note, and the standby on top of it. Ask that the note permit you to reduce principal and interest by amounts owed for excluded liabilities. Then read the standby or subordination agreement your lender requires, because that document controls what may be paid and when. Stated as of October 2026, seller notes in SBA-financed deals are commonly on standby, and full standby can leave set-off a right you cannot exercise when you need it.
• Existence covenant. A covenant that the seller entity will not dissolve, liquidate, or distribute proceeds below a stated amount for a defined period. Dissolution statutes may let you reach distributed proceeds, but that is a lawsuit you bring.
• Individual signatures. If the entity is the only indemnitor, ask the owners to join personally. Expect resistance; ask anyway, and price the answer.

One financing point, stated as of October 2026 and only as of then. The SBA’s operating procedure is revised, and a lender applies the version in force when your loan number issues, not when you signed. SOP 50 10 8 took effect June 1, 2025. SOP 50 10 8.1 applies to loans numbered on or after October 1, 2026, reissued with technical updates that September, so confirm which text is operative. Under SOP 50 10 8, a change of ownership of less than the whole business had to be a purchase of stock or membership units, so this architecture belongs to a deal where you buy all of it. Confirm the current SOP and your lender’s overlay before building structure around either.

Authority: 13 C.F.R. sec. 120.202 (loans for changes of ownership, amended Apr. 10, 2023); SBA Policy Notice 5000-880695 (Aug. 14, 2026) issuing SOP 50 10 8.1; SBA Information Notice 5000-882227 (Sept. 25, 2026), effective Oct. 1, 2026.

How can your conduct after closing hand back a liability you excluded?

Implied assumption is the quiet failure. Among the recognized exceptions to successor non-liability is a buyer that expressly or impliedly agrees to assume the seller’s obligations. Conduct supplies the implication. Paying the seller’s old vendor invoices, honoring warranty claims on units you did not build, and telling customers nothing has changed can all become evidence of it.

Two drafting habits create the same risk. The first is an assumed list drafted broadly to speed negotiation, using phrases like “all liabilities arising in the ordinary course of business.” That phrase has no date line and no subject-matter limit. The second is operating under the seller’s name, account or invoices without documenting that you do so as its agent.

If you pay an excluded obligation for commercial reasons, do it as a documented accommodation. Say in writing that the payment is without assumption and is chargeable against the holdback or the note. Then charge it. A buyer who pays quietly and complains later has built the seller’s argument.

What should you do with the assumed-liabilities article this week?

Read the agreement’s liability provisions in a fixed order: the assumed-liabilities section, the excluded-liabilities definition, the sweep sentence, then the indemnity and its survival periods. Four passes, one question each. Then test the article against the eight categories above, because those are the ones that show up in cash.

• Read the last clause of the assumed-liabilities section. If it contains “and all other liabilities,” you are in an exclusion architecture.
• Confirm a sentence says you assume nothing beyond what is identified, known or unknown, accrued or contingent.
• Confirm the exclusions name, by category: pre-closing taxes, scheduled litigation, product claims by date of manufacture, pre-closing employment claims, indebtedness, and pre-closing breaches.
• Lay the liability schedule beside the asset schedule and mark every asset whose obligation is unaddressed.
• Request the accrual report, the payroll register covering closing, the deferred revenue aging, the leases, and filed sales tax returns.
• Ask counsel whether either state imposes a purchaser notice or withholding requirement, and calendar the deadline from the earlier of payment and possession.
• Ask your lender what it will permit on a holdback and on set-off against a seller note.

After that pass you should be able to say two things out loud. Here is the perimeter. Here is what it cannot reach, and here is the money behind it.