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A buy-sell agreement is a contract among business partners that outlines procedures for handling adverse events in their partnership, preparing for the unexpected. Also known as a buyout agreement, business will, or business prenup, it is created during favorable conditions to address potential complications. This legally drafted document provides predetermined actions for scenarios referred to as the "five Ds": death, disability, divorce, disagreement, and default. These situations can significantly impact a business, and a buy-sell agreement ensures that there's a clear plan, akin to having a personal will, safeguarding the interests of all parties involved.
