Questions Every Business Owner Should Ask Their Attorney

Questions Every Business Owner Should Ask Their Attorney Before a Big Deal

Imagine you’re about to sign a partnership deal that could skyrocket your business, only to discover a hidden clause that leaves you personally liable for millions. Scenarios like this happen more often than you’d think—according to a 2023 survey, 60% of small business owners faced unexpected legal issues in contracts. Before signing on the dotted line, asking the right questions of your business attorney can protect you from costly mistakes and set you up for success.

Whether you're entering a major contract, hiring a key employee, selling part of your business, or taking on new investors, here are eight critical questions to ask your attorney to ensure your interests are safeguarded:

1. What are the major risks associated with this deal?
       Every deal carries risks. An experienced business attorney can identify potential pitfalls—like ambiguous terms, hidden liabilities, or unexpected obligations—that might not be immediately obvious. Understanding these risks upfront empowers you to negotiate better terms or make an informed decision.
2. Is the contract language clear and favorable to me?
       Legal jargon can obscure critical details, and small wording differences can have major consequences. Ask your attorney to review the agreement and confirm it aligns with your understanding of the deal while protecting your interests if things go south.
3. What are my obligations if something changes?
       Business is unpredictable. Ask what happens if circumstances shift. Are there penalties for early termination? Are you personally guaranteeing anything? What options exist for renegotiating or exiting the deal if needed?
4. Am I exposing myself to personal liability?
       Personal liability is a top concern in major transactions. Your attorney can help structure the deal—perhaps through an LLC or corporate entity—to shield your personal assets from business debts, lawsuits, or contract breaches. For example, ensuring your business is properly incorporated can create a legal barrier between your personal and business finances.
5. What protections do I have if the other party breaches the deal?
       It’s tempting to assume the other side will fulfill their obligations, but that’s not always the case. Ensure your attorney explains your protections if the other party defaults, including remedies like damages, termination rights, or dispute resolution processes.
6. Are there compliance or regulatory issues I should be aware of?
       Depending on your industry—healthcare, finance, real estate, or franchising, for instance—specific laws or regulations may apply. Your attorney can highlight any compliance requirements to help you avoid fines or legal trouble down the line.
7. Is there anything missing from the deal documents?
       What’s omitted from an agreement can be as critical as what’s included. Your attorney should flag gaps, such as missing timelines, unclear payment terms, or undefined responsibilities, that could lead to disputes later.
8. What should I be negotiating more aggressively?
       Not every contract is set in stone. Your attorney can pinpoint areas where you have leverage and suggest practical changes—such as tighter deadlines or stronger indemnities—that better protect your business.

Final Thoughts

Big deals can unlock tremendous opportunities, but they also come with significant responsibilities. Getting expert legal advice for business deals early in the process helps you minimize contract risks, safeguard your assets, and position your business for success.

If you're approaching a major transaction and want peace of mind, consult an experienced business attorney today. Asking these questions now can save you from major headaches tomorrow.

Checklist for Your Next Deal:

• Identify major risks
• Confirm clear, favorable contract language
• Understand obligations if plans change
• Minimize personal liability
• Secure breach protections
• Check for regulatory compliance
• Spot missing contract terms
• Negotiate strategically

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This article is a service of Dolev Law, a Personal Family Lawyer® Firm. We don’t just draft documents; we ensure you make informed and empowered decisions about life and death, for yourself and the people you love. That's why we offer a Life & Legacy Planning Session,Ⓡ during which you will get more financially organized than you’ve ever been before and make all the best choices for the people you love. You can begin by calling our office today to schedule a Life & Legacy Planning Session.

The content is sourced from Personal Family Lawyer® for use by Personal Family Lawyer® firms, a source believed to be providing accurate information. This material was created for educational and informational purposes only and is not intended as ERISA, tax, legal, or investment advice. If you are seeking legal advice specific to your needs, such advice services must be obtained on your own separate from this educational material.