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Avoid Using Form Commercial Contracts in Georgia

Atlanta Real Estate News | Email the Author: Justin Daniels,
Posted: July 21st, 2008
Category: commercial news



Pre printed form commercial sales agreements contain pitfalls for buyers unaware that the form is silent on many provisions that are critical to specific types of corporate and real estate transactions. I recently reviewed a form commercial sales agreement that addressed the sale of a business along with the commercial real estate.

The form, however, was silent on critical issues such as non competes from the seller and its principal owner. The form also did not address escrowing a portion of the purchase price for use in the event the seller breached the contract. When confronted with pre-printed form agreements, the buyer should not automatically assume this form is more efficient and costs less.

It is typically more difficult and time consuming for an attorney to review a form prepared by someone else because he or she must figure out what has been left out or not addressed in the draft contract. As a result, the buyer should always insist whenever possible on drafting the sales documents and not rely on the use of the pre printed form or other seller generated form agreement.

As always, your trusted legal resource for practical advice.

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Viewing 3 Comments

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    I represent a lot of developers/sellers and have generated many custom forms to protect the seller's interests. However, I also represent many Buyers and have created custom forms on the buyer's behalf.

    There are always two sides to the transaction and by definition the goals are adverse. This is why many form contracts try to find middle ground and protect both parties equally well. It also gives agents a familiarity with contracts to be able to negotiate deal points and not legal language. While I understand your intent to caution buyers, I don't think form contracts are necessarily bad. You can always add special stipulations and exhibits to protect your client's interest - whether buyer or seller.

    As for your comment about attorney's wasting time to decipher the contract, what happens when both buyer and seller hire attorneys? Sometimes the form contract can help attorneys work from common ground. I just love those deals when there is a buyer with his agent and attorney vs a seller with his agent and attorney. Sometimes I wonder how any deals get done with all the advisers working to outdo the other.
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    I typically find that having to add an exhibits and special stipulations is difficult, time consuming and can be costly.

    As for the back and forth between attorneys that is where hiring an attorney who has good judgment on what is significant and what is not worth the fight becomes very important.
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    Great advice on the use of pre-printed form contracts. One size does not fit all.
 

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