Having seen too many clients face shoddy contractual work and failed contracts, there are the patterns in these often-avoidable outcomes. Protect yourself with these guidelines.
A client said to me after trial, in which she had prevailed on the majority, but not all of the issues: “If only I had taken the time at the beginning to write out what I understood would happen and had the other party sign, we would have had a better chance of having the judge see that last point our way. It didn’t occur to me at the beginning that we could have had such a different understanding of what was to happen (or what was included).”
Yes, you should always have your attorney review a contract to purchase a business or real estate or a lease before you sign the document. Most legal problems that come to me are the result of a poorly drafted or one-sided document. Legitimacy is only one concern; just because “an attorney” drafted a document does not mean that it serves your interests, unless the drafting attorney was your attorney. Your attorney will look out for your interests.
In today’s world, most purchases and sales of businesses are of business assets, not stock, and it becomes imperative to know exactly what the business assets are. It is also important to know if the assets have been pledged as collateral for a loan, and whether they are owned by the business or leased by the business. Three recent problems come to mind with respect to the value of the business assets.