A buy/sell agreement is a legally binding contract between business partners that governs what happens to ownership shares if a partner dies, becomes disabled, or exits the business. A valid buy/sell agreement requires an accurate business valuation to establish the purchase price — without one, surviving partners and heirs are left to negotiate or litigate value under the worst possible circumstances. Life insurance and disability insurance are typically used to fund the buyout, making the valuation the starting point for the entire plan.