Ever hear the saying, “The devil is in the details”? In business deals, it couldn’t be truer.
A few years ago, I met an entrepreneur, we’ll call him Mark. On paper, Mark had struck gold: a profitable company, loyal customers, and a seller eager to close. It looked like the deal of a lifetime. But just three months later, his dream turned into a nightmare.
👉 A lawsuit from a former employee.
👉 Unpaid tax debts he didn’t see coming.
👉 Hidden contract obligations that trapped him.
What went wrong? Mark skipped over the legal fine print, the very stuff most buyers (and sellers) think they can “get to later.”
And here’s the hard truth: later often comes with a price tag in the millions.
The Legal Traps That Can Sink Your Deal
I’ve seen this happen again and again. That’s why I want to share the most common landmines in business deals and how to avoid them.
1️⃣ Skipping Proper Due Diligence: Buying a business without digging into its financial and legal history is like buying a house without checking for cracks in the foundation. Debts, lawsuits, or restrictive contracts can all be hiding under the surface.
2️⃣ Weak or Generic Purchase Agreements A handshake won’t protect you. A clear, airtight agreement should spell out exactly what’s being sold, payment terms, contingencies, and non-competes. Miss this, and you could be stuck with a deal you regret.
3️⃣ Ignoring Intellectual Property From trademarks to customer data, you need to know exactly what you’re getting. I’ve seen buyers assume they own a brand name or digital assets—only to find out they don’t. Costly mistake.
4️⃣ Structuring the Deal the Wrong Way Are you buying the entity or just the assets? That single choice could be the difference between a clean deal and inheriting years of liabilities.
5️⃣ Not Bringing in the Experts I can’t stress this enough: skipping legal or tax advice to “save money” usually costs 10x more down the road. The smartest deals are done with lawyers, tax experts, and brokers at the table.
Mark didn’t buy a bad business. He bought blind. And that’s the lesson: it’s not just about the company, it’s about how you protect yourself in the deal.
If you’re thinking about buying or selling, don’t just focus on the price tag. Protect yourself from the landmines first. That’s how you close a deal that actually lasts.
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