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.

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