Long-stop date
Factual definition
A long-stop date is a contractual outside date after which an eligible party may have a right to terminate if closing has not occurred, subject to agreed conditions, extensions and restrictions. It is not necessarily an automatic expiry or a regulator’s deadline.
Check termination rights when regulatory clearance is delayed
Hypothetical: signing occurs with regulatory clearance outstanding, and the outside date is six months after signing. At that date, the agreement determines who may terminate, whether an extension applies and whether fault or other restrictions bar termination; clearance delay alone does not give every party an unconditional right.
Read the extension before treating the date as an exit
A filed merger agreement makes its outside-date termination right unavailable to a party whose failure to perform caused the missed closing. That is one negotiated provision, not a rule for every deal.
Read the right, exceptions, notice mechanics and any extensions together.
Hypothetical terms. A deal names 30 June as the outside date but automatically extends it to 30 September if regulatory approval is the only unmet condition and the specified extension requirements are satisfied.
On 30 June those requirements are satisfied. The date has therefore extended under the assumed contract; a party cannot rely on 30 June alone to claim the outside-date termination right.
If approval remains missing on 30 September, determine which party can give a valid termination notice and what survives termination. A deposit, confidentiality obligation, expense allocation or claim for an earlier breach may have its own treatment.
The transaction team should track the operative date and remaining conditions rather than merely counting days from signing.
The acquisition deadline and funding deadline can differ
Extend the hypothetical by assuming the acquisition agreement moves its outside date to 30 September, but a separate financing commitment expires on 31 July unless the lenders agree to extend it. Changing the acquisition agreement’s date does not, under these assumed terms, extend the financing commitment.
The team needs to resolve the funding deadline before relying on the longer closing window. Track the target closing date, operative outside date and each funding expiry separately, with the conditions and person responsible for obtaining any extension.
Where Long-stop date fits
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