Post-Closing Obligations

Closing the sale of a veterinary practice is a significant step in the transition process, but it is not the end of the deal. Both the buyer and seller have post-closing obligations to each other, as well as to the practice. Whether you are buying or selling a practice, it is crucial to work with an experienced veterinary attorney, 

At Mahan Law, we work with veterinary clients nationwide to help them meet their post-closing responsibilities. From indemnification claims to purchase price adjustments to details not discovered during due diligence that emerge post-closing, we know what it takes to achieve the seamless transfer of a veterinary practice.

Our veterinary attorneys will help you navigate every aspect of the practice transition: signing the letter of intent, conducting due diligence, negotiating and preparing the purchase and sales agreement, closing the deal, and meeting your post-closing obligations. Above all, we will provide you with informed representation and always work in your best interests. Contact our office today to schedule a consultation. 

Key Post-Closing Issues in Veterinary Practice Sales

The closing date is typically the first time the buyer assumes control of the practice. There will not only be a change in leadership, but changes in personnel and strategic management as well. 

Regardless of whether the seller remains in management for a set time period, his or her responsibilities to the practice may not be over. The purchase and sales agreement will likely include representations, warranties, and restrictive covenants that govern the seller's post-closing conduct. At Mahan Law, we regularly advise clients on the following factors that may arise after the deal closes.

Restrictive Covenants in Post-Closing Sales

A typical agreement contains covenants that spell out the seller's post-closing obligations regarding both practice and future business engagements. This includes:

  • Non-solicitation agreement, in which the seller agrees not to solicit clients or poach employees from the practice. 
  • Non-compete agreement, restricting the seller from opening another veterinary practice for a set period of time in a specific geographic region.

There may also be employee and client matters that factor into a practice transition. For example, it is crucial to clarify whether the seller or buyer will be obligated to provide employees wages and benefits for a certain period. Moreover, the seller may be required to issue press releases or notices announcing the sale of the practice to clients, as well as to the general public.


Indemnification clauses are designed to protect the buyer in the event of a breach of warranties by the seller. At Mahan Law, we work with clients to help them understand their liability in terms of the minimum scope and duration of the indemnification, as well as the amount that can be claimed against escrow. Ultimately, there should be an indemnification "cap" that limits the amount the seller would be required to be in the event of a breach, but the indemnification structure must also protect the buyer's interests. 

Purchase Price Adjustments

Although purchase price adjustments are common after veterinary practice sales, they are usually relatively minor. The buyer may elect to adjust the purchase price based on working capital or other financial factors. If the buyer does not raise substantial claims and both parties agree, however, the adjustment can be made through funds held in escrow. 

Typical purchase price adjustment methods include:

  • One-step adjustment -- The seller and buyer agree on the final working capital and purchase price at closing.
  • Two-step adjustment -- This method, which is much more common, allows the buyer to review financial information for several days and adjust the price a second time.

In the event that adjustments or disagreements over valuations lead to disputes, it takes the steady hand of an experienced veterinary attorney to help you explore your options. 

At Mahan Law, we believe that it is incumbent on both parties to act in good faith to resolve disputes. If an agreement cannot be reached, we prefer to resolve disputes through alternative resolution methods, such as negotiation, mediation, or arbitration. When necessary, we collaborate with independent financial professionals and accountants to verify the purchase price in order to facilitate a resolution. Trust our experienced veterinary attorneys to help you expedite the intended transaction and achieve your objectives.

The Mahan Law Difference

When you become our client, you not only partner with a team of talented veterinary attorneys, you collaborate with a fellow veterinary professional. Lead attorney Anthony Mahan is the owner of a veterinary clinic and has a firm grasp on practice transitions and post-closing obligations. Attorney Mahan regularly co-counsels with lawyers throughout the nation who have a working knowledge of regional veterinary markets and provide each client with trustworthy advice and objective insights. 

Contact Our Experienced Veterinary Attorneys

If you are involved in the purchase and sale of a veterinary practice, you need the informed representation Mahan Law provides. Rest assured, we are committed to helping you close the deal and meet your post-closing obligations. Our legal team will work closely with you to help you engage in a seamless and successful practice transition. Contact our office today to speak with an experienced veterinary lawyer.