A Closer Look at 'Accidental Contracts'

By: Tom Muller
– GlobeSt.com

It's not all that unusual to see such a term sheet calling for, say, a 20-day due diligence period. This is apparently supposed to be impressive to the seller, showing that the buyer is a can-do player. Unfortunately, unless the title work and survey have already been completed, it is very unlikely they can be done, let alone reviewed, within that 20-day period. Nor can the necessary Phase I environmental review be done and reviewed within 20 days. A sophisticated seller will understand that this apparently motivated buyer actually doesn't know what he's doing.

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