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COVID-19 Era Due Diligence Part 3

Uncertainty remains. However, buyers are still buying, just mitigating the added risks caused by COVID-19. These are some contract-related questions that are coming up during Due Diligence:

  • Did the business default on any third-party agreements?
  • What are the termination rights on any key contracts?
  • Are counterparties adhering to their contracts?
  • Were terms modified or waived in a way that would impact future enforcement, force majeure, or other provisions that would enable termination or suspension of an agreement?
  • What ongoing challenges and risk will the business face due to non-performance?

Business owners should review their current practices now, document their new processes and be prepared to address buyer concerns.

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