If you’re looking to purchase a business, it is often not what’s in the contract but rather what’s not in the contract that can cause the most problems. This information is especially important for small business owners who tend to have more to lose. Some of the most common items that are left out of contracts include intangible and hard assets as well as payment terms.
Understanding who’s involved
If a business owner or seller isn’t doing their due diligence, then the contract may go into business litigation, which can cause months of headaches. Many times, issues arise because the person and their attorney crafting the contract did not correctly insert the parties involved. Missing even one party can allow them to escape legal obligations and essentially bring down the whole contract. A good example of how to ensure that all parties are included is to add the organization or business right after a person’s name.
The listing of items for sale
If you’re seeking to purchase a business, one of the most important things you need to put in the contract is a list of all the items you are being promised. Logos, assets and trademarks are just a few of the items you should ensure are found in the contract.
Adding disclosure agreements
A disclosure agreement involves a written statement saying that all parties have communicated any legal obligations, debts, fines and lawsuits. This is often the seller’s responsibility as they do not want the contract to become void due to not disclosing these items. However, this important information should never be assumed to be included in the contract. You, the buyer, should take the time to make sure that the disclosure agreement is added.
There are a lot of moving parts regarding the selling or purchasing of a business. You may want to speak with a professional attorney to confirm that all items are included and that they are accurate.