In which situation would a Disability Buy-Sell Agreement specifically be utilized?

A Disability Buy-Sell Agreement is specifically designed to address situations where a partner becomes disabled and is unable to continue participating in the business. The purpose of this agreement is to ensure that the business can continue to operate smoothly by providing a clear plan for the transfer of the disabled partner's interest in the business to the remaining partners or to the business entity itself. This ensures that key decisions can be made without the complications that might arise from a partner's sudden disability.

In contrast, situations such as retirement, voluntary sale of business interest, or termination for cause do not directly involve the specific needs addressed by a Disability Buy-Sell Agreement. Each of these scenarios might use different types of agreements or clauses to outline the procedures and consequences involved in the departure of a partner from the business. The focus of a Disability Buy-Sell Agreement is unique to the context of disability, making it essential for business continuity in such cases.