Long Stop Date
The deadline by which all conditions must be satisfied and completion must occur, after which either party may terminate.
Full Definition
The long stop date is the contractual deadline by which all conditions precedent must be satisfied (or waived) and completion must occur. If this date passes without completion, either party typically has the right to terminate.
Purpose:
- Creates certainty on maximum timeline
- Prevents deals dragging on indefinitely
- Triggers for termination rights
- Focuses parties on resolving issues
Typical long stop periods:
- Simple private deals: 2-4 months from signing
- Regulated deals: 6-12 months (allowing for regulatory approval)
- Complex cross-border: 12-18 months
Long stop date mechanics:
- Conditions must be satisfied by long stop date
- If not satisfied, either party may terminate
- Sometimes termination right limited to non-defaulting party
- May be extended by mutual agreement
- Break fees may apply on termination
Negotiation points:
- Length of period (seller wants shorter, buyer wants longer)
- Extension rights and conditions
- Consequences of expiry (automatic termination vs option)
- Costs and break fee implications
- Who bears risk of regulatory delays
Setting an appropriate long stop date requires realistic assessment of condition satisfaction timelines.
Related Terms
Conditions Precedent
Specific requirements that must be satisfied before a transaction can complete.
Completion
The legal transfer of ownership when all conditions are satisfied and the transaction formally closes.
Signing
The execution of the definitive transaction agreements, which may or may not coincide with completion.
Break Fee
A penalty payment agreed in advance, payable if one party withdraws from or fails to complete a transaction.