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A bulk sales agreement sets forth the terms and conditions regarding the transfer of a large segment of the seller's materials, merchandise and the like. The contract must be for the purpose of transferring business assets.
The sale of a large number of real estate properties at the same time as if they were one unit. The properties are not connected and usually have nothing in common except that they are sold in the same transaction.
The purpose of the bulk transfer law — also referred to as a bulk sale — is to protect the creditors of a business by notifying them that most or all of the company's assets are being sold. This is to prevent a seller from pocketing the proceeds of a business or asset sale without paying off creditors.
Under California law, a bulk sale is defined as a sale of more than half of a business' inventory and equipment, as measured by fair market value, that is not part of the seller's ordinary course of business. In order for the law to apply, the seller has to be physically located in California.