8 Questions an Experienced M&A Lawyer Asks Before Anyone Signs the Deal
The headlines celebrate acquisitions after the ink dries. Experienced dealmakers know the real work happens long before anyone signs.
A promising valuation, enthusiastic negotiations, and a polished pitch deck can create momentum, but momentum isn't the same as certainty. Every acquisition carries hidden obligations, operational risks, contractual limitations, and governance issues that may not be obvious during initial discussions.
The purpose of due diligence isn't to find reasons to abandon a deal. It's to ensure everyone understands exactly what they're buying or selling.
That begins with asking the right questions.
1. What Exactly Is Being Acquired?
It sounds obvious, yet this question is often more complicated than expected.
Does the buyer intend to purchase the company's shares or only selected assets? Are intellectual property rights properly assigned? Do subsidiaries, customer contracts, software licenses, and proprietary data all belong to the selling entity?
Clarifying precisely what's included prevents costly assumptions from finding their way into the final agreement.
2. Are There Risks Hidden in Existing Contracts?
Contracts frequently determine whether a transaction proceeds smoothly, or becomes unexpectedly complicated.
An experienced M&A lawyer will review agreements for issues such as:
· Change-of-control provisions that require customer or vendor approval
· Non-assignment clauses that could restrict the transfer of contracts
· Long-term obligations that survive closing
· Exclusivity provisions or restrictive covenants that may affect future operations
· Existing disputes or contractual defaults that could create post-closing liabilities
Sometimes a company's most valuable asset is also its greatest transactional risk.
3. Does the Corporate Housekeeping Match the Story?
Investors and buyers pay close attention to governance because it reflects how the business has been managed over time.
Important questions include:
· Are shareholder records complete and accurate?
· Have board approvals been properly documented?
· Are equity issuances supported by the required corporate records?
· Do ownership records align with what's being presented during negotiations?
Good governance doesn't simply satisfy due diligence. It builds confidence that the business has been managed responsibly.
4. Where Could Liability Follow the Buyer?
Not every legal risk disappears at closing.
Pending litigation, unresolved employment matters, tax obligations, regulatory investigations, intellectual property disputes, and compliance concerns may continue long after ownership changes hands.
Understanding those risks early allows buyers to negotiate indemnities, purchase price adjustments, escrow arrangements, or other contractual protections before the transaction closes.
5. Will the Business Continue Operating Smoothly After Closing?
The best acquisition isn't just one that closes successfully. It's one that continues operating successfully.
Experienced M&A deal counsel looks beyond the purchase agreement to evaluate issues such as management transitions, employee retention, customer relationships, supplier continuity, and operational integration. These practical considerations often influence long-term value as much as the financial terms themselves.
6. Are the Purchase Agreement's Protections Strong Enough?
A purchase agreement should do far more than record the agreed purchase price.
Effective agreements carefully address:
· Representations and warranties
· Indemnification obligations
· Closing conditions
· Earn-out provisions
· Post-closing responsibilities
· Dispute resolution procedures
Well-drafted agreements establish expectations while reducing uncertainty if disagreements arise later.
7. Is Every Party Working Toward the Same Outcome?
One of the most overlooked aspects of a transaction is alignment.
A founder may prioritize speed. A buyer may prioritize certainty. Investors may focus on maximizing value, while management is concerned about employee retention and future operations.
Recognizing these differing objectives early allows negotiations to remain productive instead of becoming unnecessarily adversarial.
8. What Happens After the Signatures?
Closing day marks the end of the transaction, not the end of the legal work.
Ownership transfers, regulatory filings, governance updates, employment matters, contractual notices, and integration planning all require careful execution. Planning for these obligations before closing reduces disruption and helps the business move confidently into its next chapter.
The Best Deals Are Built Long Before Closing
Successful acquisitions don't happen because the negotiations went well. They happen because difficult questions were asked before difficult problems had the chance to appear.
At Alex Nahai Law, we help buyers, sellers, founders, and investors navigate every stage of mergers and acquisitions with practical, strategic legal guidance. From comprehensive due diligence and contract negotiations to governance reviews and transaction structuring, we focus on protecting our clients' interests while helping deals move forward efficiently.
If you're preparing to buy, sell, or invest in a business, contact Alex Nahai Law today to schedule a consultation and discuss your transaction with confidence. Our team comprises corporate transaction lawyers, M&A lawyers, venture capital attorneys, and more.
