What Can Make A Purchase Transaction Fail?

Things happen. Sometimes a Buyer agonizes over whether to walk away from a business purchase.

Here are some deals gone bad that we’ve experienced:

• One of the major assets of the Seller is a contract that turns out cannot be assigned. This can be a contract supplier with an especially good price, a software license or a customer contract.

• Key equipment fails during due diligence, and it makes no financial sense to buy the business.

• The lease cannot be assigned or the landlord takes the opportunity to jack up the rent.

• Buyer can’t get favorable financing.

• The troubled Seller has to declare bankruptcy before the closing occurs.

It is important to have the ability to terminate the purchase agreement when mishaps occur.