‘Buyer Beware’ of Business Purchase Contracts

business purchase contract

Helpful tips, tricks, and suggestion about business purchase contract, business purchase contracts, business purchase agreement. Brief and Straightforward business purchase contract, business purchase contracts, business purchase agreement guide.

Paperwork, specifically legal documents, is a prerequisite to buying any business. It doesn’t make any difference if you buy a business once in your life or do it all the time, every business acquisition purchase contract is different and requires intense scrutiny on the part of the business buyer, much more so than the business seller.

As a business buyer, each and every sentence within the business purchase contract needs to be read, understood and agreed to before you sign on the “dotted line”. As a business buyer, you want to be the writer of the purchase
contact. If the business seller, or their legal counsel writes the business purchase contract be sure you and your attorney evaluate every detail within.

“Buyer Beware!”

As a business buyer, you like to think that all business sellers are honest, forthright and have genuine intentions of developing a mutually beneficial business purchase contract. Most business sellers are! More often than not, in a business purchase contract, it’s the business buyer who exclusively must address the problem not thought of or included in the final purchase contract. The negative consequences of many common business misfortunes can be reduced, shared between the business buyer and seller, or eliminated altogether with proper business purchase contract contingency language

Fundamental Business Purchase Contract Concepts

Listed below are some fundamental business purchase contract concepts that any prudent business buyer will want to incorporate in their legal due diligence and documentation fulfillment:

Astute business buyers never present an offer to purchase a business without preceding it with a nonbinding “Letter of Intent” to purchase. No business purchase terms should ever be communicated to the business seller without a written statement from the business buyer to the seller, specifically ocumenting,
“that any, and all, purchase terms are subject to analysis, justification and confirmation by an independent business appraisal entity, employed and paid by the business buyer”.

Be suspect of “canned” business purchase contracts provided by the seller’s broker or representative, they are typically “seller biased”

Lastly, there are published business purchase contract content “checklists” available, take the time to review these, especially business seller warranties and representations

Typical business purchase contracts prepared by business sellers or their representatives often contain many provisions which are dangerous to business buyers. Take the time, invest the money, expend the necessary thought required to structure a mutually beneficial business purchase agreement with the business seller!

Source : Business Purchase Contract & Business Purchase Agreement