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Once the basic terms of the deal are agreed upon in a letter of intent , the buyer will want to sift through your business and legal records with a fine-tooth comb. This meticulous review of your business, from contracts to customer lists, is called due diligence. Litigation and potential litigation.
Due diligence is the buyer’s process of discovering and evaluating information about a seller’s business to confirm that acquiring the seller’s equity or assets is a sound investment. However, the process of conducting due diligence differs between transactions for a variety of reasons.
The purchase agreement is typically drafted by the buyer’s counsel after the letter of intent has been signed and the buyer has done enough due diligence to feel confident that it wants to pursue the transaction. where a lawsuit will be held in the event of litigation, payment of expenses associated with the transaction, and so forth).
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