What Details Can Make or Break a Business Sale?

By Michael D. Rubin, CEO & Founder · Updated September 2026 · 720 words

After the price is agreed, deals are made or broken by the details: the promises you make in the purchase agreement, what happens to key employees, how long you agree not to compete, how working capital is measured and whether the people on both sides can keep working together. Price gets the attention, but these terms decide whether you close and how much you keep.

When a sale collapses late, everyone loses months of work and the company has been exposed to a buyer who now walks away. That is why the details deserve attention from the start.

The hardest negotiating often starts after the letter of intent

A letter of intent (LOI) sets out the price and main terms, and most of it is not binding. The binding document is the purchase agreement, which your attorney and the buyer's attorney negotiate during due diligence. That is where general terms become precise obligations, and where many deals stall. Expect it, allow time for it and keep your advisor involved, because business points hide inside legal language.

Many owners assume the hard part is over once a price is agreed. In practice, the buyer's attorney drafts first, and the first draft usually favors the buyer on every open point. Responding calmly, point by point, with your attorney and advisor deciding together which issues matter, is what gets the document to signature without eroding the deal you agreed.

Promises about the business: representations and warranties

Representations and warranties are statements you make about the company, such as that the financial statements are accurate, taxes are paid and there is no undisclosed litigation. If one proves untrue after closing, the buyer may claim money back under the indemnification section. Buyers want broad promises; sellers want them limited in scope, time and dollar amount.

A reasonable middle usually exists, and reaching it quickly keeps the deal alive. See what representations and warranties to expect for the common ones and how they are limited.

Details that stall deals, and how to handle them

• Key employee agreements. Buyers often want managers or top technicians under employment or retention agreements before closing. Identify those people early and decide when and how they will be told.
• Non-compete terms. You will likely be asked not to start or join a competing business for several years within a defined area. Negotiate a scope that protects the buyer without blocking unrelated work you may want to do.
• Working capital. The agreement sets a target level of receivables and inventory, minus payables, that must be in the business at closing. If the target is set too high, the price falls quietly. See how working capital affects the price.
• Your transition role. How long you stay, in what capacity and whether you are paid for it.
• Exclusivity. How long you agree to stop talking to other buyers. A long exclusivity period with a slow buyer leaves you exposed.

People problems kill deals too

A sale brings together attorneys, accountants, lenders and advisors on both sides. The more people involved, the more chances for friction. When egos take over, or one advisor treats every point as a battle, trust fades and the buyer starts to wonder what else will be difficult. A deal that looked strong on paper can fail simply because the parties stop working well together.

Warning signs appear early. On the buyer's side: no clear strategy, an unrealistic view of the money required, or a habit of ignoring their own advisors. On the seller's side: a price anchored to emotion rather than the market, second thoughts among family owners, and difficulty separating what the company means to you from what it is worth to a buyer. Most failed sales can be traced back to issues like these that were visible well before closing.

What we do to keep the details from breaking the deal

At MDR & Associates, a principal of the firm is in every negotiation, including the purchase agreement stage, working alongside your transaction attorney and CPA. We raise the likely sticking points, such as employee agreements, non-competes and working capital, while several buyers are still competing and your leverage is highest. Steps eight and nine of our process, due diligence and legal documents, are where that preparation pays off. To discuss a deal you are considering, contact us.

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Questions owners ask next

Is a letter of intent binding?

Mostly not. The price and deal terms in an LOI are usually non-binding, but specific provisions such as exclusivity, confidentiality and sometimes expenses often are. Your transaction attorney should review any LOI before you sign, because exclusivity means you stop talking to other buyers.

How long does the purchase agreement stage take?

It usually runs alongside due diligence and can take several weeks to a few months, depending on the size of the company, the buyer's financing and how quickly issues are resolved. Organized documents and advisors who have closed deals before shorten it.