share purchase agreement (SPA)

A share purchase agreement is a document in which parties set out the terms and conditions of the sale and purchase of shares in a company. It is usually the final contract in an acquisition process and it binds parties to actually proceed with the sale. It is also referred to as stock purchase agreement or its abbreviation SPA.

In a share purchase agreement parties set out which shares are to be sold, the price thereof, the date / timeline of completion and detailed information about the parties. The agreement may also cover specific conditions e.g. a payment schedule and possible escrow.

An SPA will always include a variety of warranties and representations. Both from the selling as buying party (although those from the seller are most relevant).