The investigation focuses on the accountant's duties in conducting the financial side of due diligence. The attorney's investigation will include reviewing company records, real estate and personal property ownership matters, licenses, patents, trademarks, employment agreements, supplier and customer agreements, litigation, compliance with governmental and environmental regulations. This process allows the seller and buyer to decide whether they want to proceed with the transaction, and determine if the price and terms as specified in the LOI are acceptable. The buyer's corporate attorney usually drafts the purchase agreement. Once the buyer and seller sign the purchase agreement, neither party can changes the terms of the transaction.
Purchase agreements can be relatively simple.
Definitions for terms in the agreement. Description of assets, selling price, form of payment, and timing of payment. Allocation of purchase price and specific assets. Warranties, representations and agreements of the buyer and seller. Conduct of the business between the date of the purchase agreement and closing date.