How Critical is a Dental Practice Purchase Agreement? This Post has the Answer!

Congratulations on your decision to purchase an existing dental practice. You’ve spent years training to become a dental specialist and the time has come for you to have your own practice. You’re ready to apply what you’ve learned and of course, you’re ready to enter the lucrative world of providing dental services. Good job recognizing that it’s easier and better to buy an existing practice so that you don’t have to build one from the ground up. This way, you can become profitable from day one.

You’re ready to turn over the check. You’re ready to rock and get started. Well, until the seller presents to you the dental practice purchase agreement. You look at it and it might very well be written in French because you don’t understand it. Well, this post will help you out.

What is this Purchase Agreement?

In simple terms, it’s an agreement that lists down all the important details of the purchase of the dental practice. How critical is it? It’s actually very critical. There’s a reason why the seller wants you to sign one. It protects his interests as a seller. Best of all, it also protects your interests as a buyer.

This differs from the usual purchase agreements so you can’t really use a template. The dental industry is a complicated one and this will reflect on the purchase agreement.

With this purchase agreement, there’s no room for miscommunication. This is because everything is written clearly. Signed by both parties, it’s considered to be an enforceable contract so it really offers protection to both parties.

What are the Things Included in the Purchase Agreement?

It’s on a case to case basis. Every sale and purchase is different. However, a good dental practice purchase agreement should include the following things:

• Accounts receivables

Don’t be surprised to know that the dental practice that you’re looking at has accounts receivables. How are they going to be handled? Who will collect? Generally speaking, the buyer should collect the accounts receivables.

• Conditions to enforce the sale/purchase.

It’s a good idea to list down certain conditions that should be met to enforce the sale. If they’re not met, then there’s no obligation to buy or sell.

• Customer records

Ideally, the buyer should have access to all of the customer records. This includes the active patient list together with the inactive one. Also, the Health Insurance Portability and Accountability Act should be considered which is a federal law that protects patient confidentiality.

• Who’s accountable?

It should also be noted who’s accountable for every item on the agreement.

These are just some things to consider but you can already see that you shouldn’t go through the purchase agreement alone.

Hire a Law Firm to Make Sure that You’re Protected

Hiring a law firm that specializes in drafting and reviewing dental practice purchase agreements can help you protect your interests as a buyer. It should also help you get started on the right track. Let the law firm study the dental practice purchase agreement and recommend changes if needed.

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Author is writing various blogs and articles on dental practice about Buying or selling a Practice. Through this article author is sharing some information about Dental practice transition.