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Work through a fictional small-business purchase agreement. Prioritize economics, risk allocation, closing conditions, and a transition plan. Clauses are issues to raise with qualified counsel, not template legal language.
Four guided lessons, hands-on decision sequences, practice checks, and final decisions. Build a plan, test it, then examine the reasoning. Progress stays on this device only.
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After this lesson: Identify what is paid, when, and what adjusts at closing.
Headline price does not tell the buyer's total cash need. Clarify included inventory, debt treatment, working capital target, deposits, holdback, and closing adjustments. Each term needs a definition, measurement date, and dispute process reviewed by counsel.
A $900k price assumes $100k of usable inventory at closing. A physical count finds $82k under the agreed valuation method. The parties must apply their written adjustment mechanism rather than guess the payment.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Flag an undefined inventory adjustment before signing.
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After this lesson: Distinguish a seller statement from a buyer remedy.
Representations describe facts; covenants address actions; indemnity and related limits address agreed losses. Disclosures, survival, caps, baskets, and escrow change the real allocation. Do not assume a broad statement is collectible or that a holdback covers every risk.
The seller represents that listed customer contracts are active, with a disclosure schedule for exceptions. The buyer asks counsel to tie a material undisclosed termination to a defined remedy, including notice, claim process, and collectibility.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Choose an issue requiring specific documentation before allocating loss.
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After this lesson: Identify an approval that must happen before closing.
Conditions can make closing dependent on financing, regulatory approvals, landlord consent, key contract consent, or other negotiated items. A vague promise to ‘work it out later’ can leave the buyer with a business missing a critical right. Deadlines and termination consequences belong in the document.
The target's warehouse lease prohibits assignment without landlord consent. The buyer needs the premises to operate; counsel proposes a clear consent condition and deadline before mandatory closing.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Prioritize the lease consent over cosmetic changes to the agreement.
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After this lesson: Turn a handoff promise into measurable duties.
Customer introductions, training, records, system access, and seller support may be crucial. Define who does what and by when, while checking employment, restrictive covenant, privacy, and applicable state law with counsel. Model post-close working capital as well.
The seller says, ‘I'll help for a while.’ Buyer and counsel replace that with a proposed schedule of training sessions, introductions, data transfer, and access handoff, subject to negotiated terms.
Use the briefing above. Select the actions in the order you would take them, then run the sequence.
Apply it: Make a transition commitment observable rather than relying on goodwill alone.
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Three new scenarios check what you retained. A missed answer opens a worked explanation and a reworded question.
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Keep learning with the hands-on case. Test preparation is a separate, harder stage that asks you to calculate, inspect assumptions, and apply the method to unfamiliar facts.
Subject-specific practice tiers are in development. No external exam readiness claim is made here.
Original Aim High Hero explanations and fictional exercises. The external source provides subject reference and does not endorse this course.
U.S. Small Business Administration — Buy an existing business ↗Permanent Equity — Deal structure and terms ↗Davis Business Law — Acquisition guide ↗Cornell Wex — Contract ↗