Moving Forward with a Commercial Transaction in Texas

 Posted on February 23,2024 in Real Estate

Entering into a major commercial transaction can be an exciting yet daunting process. As a business owner in Texas, you want assurance that you are making the right decision before signing on the dotted line. A Texas lawyer can break down key considerations when moving forward with a commercial deal.

Perform In-Depth Due Diligence

Thorough due diligence is crucial before finalizing any commercial agreement. You will want to verify the other party’s financials, inspect assets, and conduct interviews. Look for any red flags that could indicate potential issues down the road. Background checks on key personnel are also advised. Do not be afraid to ask lots of questions and dig deep, as this is your last chance to uncover deal breakers. Complete due diligence protects you legally and financially.

Understand All Terms and Obligations

Carefully review all contract terms with your lawyer. Make sure you thoroughly understand all sections and legal jargon before agreeing to anything. Pay close attention to fine print details around responsibilities, operational requirements, payments, liability, dispute resolution, intellectual property, and termination. Do not gloss over complicated sections in your haste to close the deal. All obligations and potential penalties must be crystal clear. Ambiguity leads to misunderstandings and legal troubles.

Verify Finances and Assets

Enlist professional appraisers to verify their value if real estate, equipment, inventory, or other assets are involved. You want accurate assessments to set fair deal terms and facilitate future transactions or loans using these assets as collateral. Also analyze several years of financial statements from the other company using an independent accountant. Look for consistent revenue streams, profitability, debt levels, and cash flow. Economic viability will impact their ability to hold up their end of the bargain.

Create Solid Contacts

Well-crafted contracts build in contingency plans if the deal sours. State exact conditions that would trigger defaults, breaches, and termination provisions. Outline resolution processes like mediation, arbitration, or court litigation if needed. Specify sensible timeframes to cure issues or make payments before severe actions commence. Setting clear expectations for dispute resolution creates stronger, longer-lasting business relationships.

Contact Our San Antonio, TX Real Estate Attorney

Taking the essential steps above gives you the knowledge and protections needed to proceed with your commercial venture. An exciting commercial deal leads to a profitable long-term relationship when you have confidence in the transparency and strength of the agreement. Reach out to a Bexar County, TX real estate lawyer for any additional guidance before you sign contracts and move forward. With the proper preparations, your business venture can be set up for enduring achievements. Call Geoff Mayfield, Attorney at Law at 210-535-0870 for a free consultation.