Can this agreement be signed electronically?

Yes. Under the federal ESIGN Act and state UETA statutes, electronic signatures are enforceable when intent, consent, attribution, and record retention are satisfied. Exceptions such as wills and certain court orders may still require wet-ink signatures.

Is notarization required for validity?

Most run out agreements do not require notarization to be valid contracts, but notarization or witnesses can help with record authenticity and are required for specific document types in some states.

How long must I keep signed run out documents?

Retain final agreements for at least three years for tax and accounting purposes; healthcare records require six years under HIPAA. Industry-specific rules or state laws may require longer retention.

What happens if a signer uses a different business name?

Mismatched legal names can create enforceability and tax reporting issues. Use the exact legal entity name as registered and include a DBA line if needed to clarify identity.

Can I update the agreement after signing?

Post-signature amendments require a signed amendment or replacement agreement executed by the same authorized parties. Documenting the change maintains clear evidence of mutual consent.

How do I prove who signed and when?

Use an eSignature provider that produces an audit trail with timestamp, IP address, and signer attribution. Retain the certificate of completion alongside the signed PDF for evidentiary purposes.

Electronic Signature
Templates
Miscellaneous
Business Run Out Agreement

Business Run Out Agreement

This template is fully customizable. Edit the text, fill out the fields, and send it for signature. Give it a try!

BUSINESS RUN OUT AGREEMENT

This Business Run Out Agreement ("Agreement") is entered into on Effective Date: by and between First Party Name: with principal address: and Second Party Name: with principal address: .

WHEREAS

WHEREAS, the Parties have previously conducted business operations that include existing customer obligations, inventory disposition and contract performance obligations that will continue after a partial transfer, divestiture, or cessation of ongoing operations; and

WHEREAS, the Parties desire to establish the terms by which one Party shall perform or supervise the orderly run out, wind-down, or fulfillment of such legacy business matters for a defined period, and to allocate payment, risk and confidentiality obligations associated with that run out.

NOW, THEREFORE, in consideration of the mutual promises contained herein and other good and valuable consideration, the receipt and sufficiency of which are acknowledged, the Parties agree as follows.

SCOPE OF WORK

Run Out Services (describe duties, deliverables, exclusions)

The Provider shall perform the run out services described above in a commercially reasonable manner, consistent with industry standards, and shall use reasonable efforts to mitigate costs and preserve value for the Parties. Any material changes to the Scope of Work must be agreed in writing by authorized representatives of both Parties.

PAYMENT TERMS

Run Out Fee (total or recurring) Payment Schedule Invoicing and Payment Terms Late Payment Fee

All amounts due under this Agreement are exclusive of taxes, duties and similar governmental charges, which, where applicable, shall be borne by the Party required to pay them. If payments are not made when due, the Provider may suspend performance after providing ten (10) days' written notice and an opportunity to cure.

TERM AND TERMINATION

Run Out Start Date Run Out End Date (if known) Termination Notice Period (days)

This Agreement commences on the Run Out Start Date and continues until the earlier of the Run Out End Date or termination in accordance with this Section. Either Party may terminate this Agreement for material breach by the other Party if the breaching Party fails to cure such breach within the Termination Notice Period after receipt of written notice specifying the breach. Termination shall not relieve either Party of obligations accrued prior to the effective date of termination.

CONFIDENTIALITY

Each Party (the "Receiving Party") shall hold in confidence and not disclose to any third party any Confidential Information of the other Party (the "Disclosing Party") disclosed in connection with this Agreement, except to those employees, agents or subcontractors with a need to know who are bound by confidentiality obligations at least as protective as those in this Agreement. "Confidential Information" means non-public information disclosed by the Disclosing Party that is marked or reasonably should be understood as confidential, including customer lists, pricing, contracts and commercial terms. Confidential Information does not include information that (a) is or becomes publicly available without breach of this Agreement, (b) was already lawfully known to the Receiving Party prior to disclosure, (c) is independently developed by the Receiving Party, or (d) is required to be disclosed by law, regulation, or valid order of a court of competent jurisdiction, provided the Receiving Party gives prompt notice to the Disclosing Party and cooperates in any lawful effort to limit disclosure.

The confidentiality obligations in this Section shall survive termination of this Agreement for a period of three (3) years, except that trade secrets shall be protected for as long as such information qualifies as a trade secret under applicable law.

INVOICES AND NOTICES

First Party Notice Contact First Party Notice Address Second Party Notice Contact Second Party Notice Address

Notices and invoices shall be sent to the notice addresses set forth above and shall be deemed given when received by hand, one business day after delivery via overnight courier, or three business days after deposit in the U.S. mail, postage prepaid, or upon confirmed electronic transmission where the receiving Party has consented in writing to accept notices electronically.

GOVERNING LAW; DISPUTE RESOLUTION

Governing State

This Agreement shall be governed by and construed in accordance with the laws of the Governing State without regard to conflict of laws principles. The Parties shall attempt in good faith to resolve any dispute arising out of or relating to this Agreement through negotiation between senior representatives. If the Parties cannot resolve a dispute through negotiation within thirty (30) days, either Party may pursue any remedy available at law or in equity.

MISCELLANEOUS

Entire Agreement: This Agreement constitutes the entire agreement between the Parties with respect to its subject matter and supersedes all prior and contemporaneous agreements, understandings and communications, whether written or oral. No amendment or waiver of any provision of this Agreement shall be effective unless in writing and signed by authorized representatives of both Parties.

Assignment: Neither Party may assign or transfer its rights or obligations under this Agreement without the prior written consent of the other Party, except that either Party may assign this Agreement in connection with a merger, sale of all or substantially all assets, or change of control, provided the assignee assumes all obligations hereunder.

Severability: If any provision of this Agreement is held invalid or unenforceable, the remaining provisions shall remain in full force and effect and the Parties shall negotiate in good faith to replace the invalid provision with a valid provision that achieves the Parties' original intent as nearly as possible.

Survival: Any provisions that by their nature should survive termination or expiration of this Agreement shall survive, including but not limited to payment obligations, confidentiality, indemnification, and governing law.

First Party Printed Name:

By:

Date:

Second Party Printed Name:

By:

Date:

What a Business Run Out Agreement Covers

A Business Run Out Agreement documents the steps, responsibilities, and financial arrangements required to conclude a business operation, project, or contract when active work ceases but obligations remain. Typical uses include winding down a project, completing outstanding deliverables, handling final invoicing and collections, transferring residual assets or liabilities, and setting timelines for final reporting or audits. The agreement clarifies who retains responsibility for warranty claims, ongoing client communications, and record retention, reducing disputes during the post-termination phase and preserving enforceable rights for all parties.

Why use a Business Run Out Agreement

A clear run out agreement reduces ambiguity about final obligations, allocates costs and responsibilities, protects against unexpected liability, and documents timelines for deliverables, billing, and record retention.

Who typically prepares and signs this agreement

In many cases the agreement is jointly prepared by project, finance, and legal stakeholders, then signed by authorized officers or their delegates.

Project owners and prime contractors managing final deliverables and warranty periods for clients.
Finance and accounting teams responsible for final invoicing, collections, and tax reporting.
Legal or contracts departments allocating post-termination liabilities and dispute-resolution duties.

Step-by-step: completing a Business Run Out Agreement

Follow these steps to prepare, approve, and finalize a run out agreement with minimal delay and clear responsibilities.

01

Draft core terms: List scope, timeline, payments, and liabilities.
02

Internal review: Obtain finance and legal approval before external circulation.
03

Circulate to parties: Share draft with stakeholders for comments.
04

Execute and store: Collect signatures and save final version securely.

Where to send or file the signed agreement

Route the executed agreement to stakeholders who manage compliance, accounting, client communications, and records retention.

Accounting: Final invoice and payment records.
Legal: Contract archive and dispute records.
Project Management: Close-out deliverable register.
Records Retention: Secure long-term storage per policy.

Configuring an online run out workflow

Set up a clear digital workflow to route drafts, collect eSignatures, and archive completed agreements automatically.

Field	Configuration
Authentication	Email link or SMS code
Signing Order	Sequential or parallel as needed
Reminders	Automated reminder schedule
Archive	Save PDF + audit trail

Distributing and eSigning the agreement

Ensure the chosen platform meets any industry compliance requirements (for example HIPAA for healthcare) and that signed files include a tamper-evident audit trail and retrievable metadata.

File formats: PDF, DOCX supported
Integrations: CRM and cloud storage
Authentication: Email, SMS, or KBA

Typical deadlines and timing expectations

A run out agreement should include clear dates for deliverables, final billing, dispute windows, and record retention milestones.

Effective date and notice:

State the MM/DD/YYYY effective date and any notice lead times.

Final deliverable deadline:

Specify completion date for remaining work.

Final invoice submission:

Set due date for final billing and supporting documentation.

Dispute period:

Establish time window for claims or adjustments.

Record retention start:

Define when retention clocks begin for archives.

Common mistakes to avoid

Leaving the scope vague, which creates disagreement about what work remains and who pays for it.
Failing to identify the authorized signer or using a name that does not match formation documents.
Missing a clear final invoice date and payment method, which delays collections and can trigger penalties.
Not retaining complete signed records and the audit trail, making it difficult to prove execution or compliance later.

Risks and potential penalties for errors

Contract disputes: Increased litigation risk

Collection delays: Lost or late revenue

Tax reporting: Incorrect filings may trigger penalties

Regulatory fines: Industry-specific penalties

Evidence gaps: Unprovable signatures

Breach claims: Ongoing liability exposure

Key security and storage considerations

Encryption: TLS 1.2/1.3 in transit

At-rest protection: AES-256 encryption

Access controls: Role-based permissions

Audit trail: Timestamped signing events

Compliance: ESIGN and UETA adherence

HIPAA support: BAA available when required

eSignature solution pricing and capabilities

Compare common pricing and capability dimensions for signing and storing a Business Run Out Agreement; signNow appears first for consistency in comparison.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	Yes, 7-day trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Available	Available	Available	Available	Varies by plan
Audit Trail	Yes	Yes	Yes	Yes	Yes
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Real-world examples of run out workflows

These examples show how organizations completed run out work while maintaining compliance and finalizing revenue.

Optica Ventures

The interface is simple and easy-to-use for our team; more importantly, it is just as easy for our customers.

They used online execution to close outstanding deliverables quickly.
Finalizing remote signatures and a clear final invoice process reduced collection time while preserving audit-ready records for future reference.

Martin Properties

I can process and execute all of these documents online with 100% compliance and built-in security.

Mobile signing allowed field staff to finish close-out tasks.
The team archived signed run out agreements with complete audit trails, reducing post-termination queries and speeding dispute resolution.

Frequently asked questions about run out agreements

Answers to common execution, retention, and legal-validity questions for Business Run Out Agreements.

Need help? Contact support

Can this agreement be signed electronically?
Yes. Under the federal ESIGN Act and state UETA statutes, electronic signatures are enforceable when intent, consent, attribution, and record retention are satisfied. Exceptions such as wills and certain court orders may still require wet-ink signatures.
Is notarization required for validity?
Most run out agreements do not require notarization to be valid contracts, but notarization or witnesses can help with record authenticity and are required for specific document types in some states.
How long must I keep signed run out documents?
Retain final agreements for at least three years for tax and accounting purposes; healthcare records require six years under HIPAA. Industry-specific rules or state laws may require longer retention.
What happens if a signer uses a different business name?
Mismatched legal names can create enforceability and tax reporting issues. Use the exact legal entity name as registered and include a DBA line if needed to clarify identity.
Can I update the agreement after signing?
Post-signature amendments require a signed amendment or replacement agreement executed by the same authorized parties. Documenting the change maintains clear evidence of mutual consent.
How do I prove who signed and when?
Use an eSignature provider that produces an audit trail with timestamp, IP address, and signer attribution. Retain the certificate of completion alongside the signed PDF for evidentiary purposes.

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