THE MOST DANGEROUS “HELP” IN SMB ACQUISITIONS

Every week, a buyer sends me the same innocent-sounding question:

This is not a negotiation question.

This is a survival question.

And the answer is a hard, non-negotiable: No.​
Not “probably no.”
Not “in some cases.”

A 100% NO.

Because what you’ve just been handed is the deal equivalent of a Trojan Horse —
a document that looks friendly…
looks helpful…
looks neutral…

…but is engineered to strip you of every protection you think you have.

Let’s break the trap down.

THE FACT PATTERN (THE TRAP SPRING)

The setup is nearly universal:

• Broker offers their “standard” purchase agreement
• Or they push an association form (CABB, BBF, etc.)
• Or worse — broker insists on it (HUGE red flag here)
• They imply it’s “fair to both sides”
• They suggest it’ll “save you legal fees”
• They subtly shame you for wanting your own draft

This sounds helpful.
It feels like cooperation.
It presents as efficiency.

But make no mistake:

This is the single most dangerous (and common) legal disaster buyers walk into.

If you step inside, you won’t see the damage until it’s too late.

THE CORE TRUTH BROKERS NEVER SAY OUT LOUD

**This Is the Most Important Contract in Your Entire Deal.

You Never Let the Person Paid to Close the Deal Draft It.**

A broker’s #1 incentive is simple:

Close the deal → earn the commission.

If the deal explodes after closing?
If the numbers were cooked?
If assets weren’t transferred?
If the business melts down?

They have zero liability.​
Zero financial exposure.
Zero consequences.

You do.

You — with the personal guarantee.
You — with the 7(a) loan.
You — with the future on the line.

There is no legitimate, rational, defensible reason for a broker to draft the definitive agreement in a transaction where:

• you are the one taking the risk
• you are the one buying the assets
• you are the one guaranteeing the loan
• and they have no duty of care to you - none. zero.

Let’s open the Trojan Horse and inspect the damage.

WHAT’S INSIDE THE BROKER AGREEMENT (THE CARNAGE)

A) They’re Far Too Abbreviated to Protect You

The agreement is so thin it simply cannot carry the legal weight of a business transfer.

Missing:

• deal structure
• definitions
• mechanisms
• adjustments
• legal protections
• proper schedules
• closing deliverables

It’s “simple” the same way a parachute without straps is “simple.”

Maybe if you're buying a $20,000 food truck this might be the type of agreement you'd use.

But that's not what you're buying here.

B) Missing or Confusing Critical Closing Documents

Shocking but common:

No:

• Bill of Sale
• IP Assignment
• Transition agreements
• Asset schedules
• Contract assignment language
• Closing deliverables
• Tax allocation
• Mechanics for transferring anything

Some broker forms don’t even define what assets you’re buying.

Almost all confuse asset and stock purchase structure mechanics, terms and deliverables so you have a frankenstein-ish combination that is a legal disaster.

C) Infecting the Deal With Real-Estate Terms

You’ll see language like:

• “open escrow”
• “inspection period”
• “earnest money release”

These are real-estate concepts repurposed into a business sale where they do not belong.

It’s legally incoherent.

D) Buyer Takes On Obligations They Should Never Accept

Common examples:

Wrong. Your only obligation should be to provide cash at close (doesn't matter where it comes from - you or the lender). To specify it this way makes it so that if your sources or uses changes from term sheet to commitment letter (happens 100% of the time) you're either a) in breach of contract; or b) need to amend your purchase agreement.

Broker forms routinely misstate (and over-state) your obligations.

E) Reps & Warranties Are Watered Down to Nothing

In a proper buyer-drafted agreement:

• reps are detailed
• reps are customized
• reps span 8–12+ pages
• reps protect your PG
• reps protect your investment

In broker forms:

Sometimes half a page.
Sometimes generic boilerplate.
Sometimes missing fundamental categories entirely.

Always missing any reference to disclosure schedules (critical to make reps make sense)

If reps are thin, you're buying and staking your future on a hope and prayer.

F) Indemnification Is a Nightmare

Typical broker-form indemnification:

• caps too low to matter
• survival periods absurdly short (6–12 months for everything - including fundamentals)
• sometimes no indemnification at all
• zero escrow requirements
• zero carve-outs for fraud
• zero backstop by seller

If the seller lied, you will have almost no recourse.

Imagine discovering the books were cooked…
…six months after closing…
…with no ability to recover anything.

That’s the world these forms create.

G) Hidden Broker Protections You Don’t See Coming

This one’s quiet…and ugly.

Many broker forms include:

• indemnification of the broker
• joint fee guarantees
• language elevating the broker’s protections above your own

You end up protecting the broker…
…from mistakes they made
…in a contract they illegally drafted
…that you never should have signed.

H) Buyer’s Counsel Can’t Fix It Without Rebuilding the Entire Agreement

Your lawyer has to:

• rewrite 60–70% of the document
• add missing sections
• correct incorrect legal concepts
• rebuild closing mechanics
• renegotiate every essential protection

It’s like trying to turn a kayak into a submarine.

The foundation is wrong.

Everything becomes expensive, slow, and adversarial.

I) Sellers Think Broker Forms Are “Neutral” — And That’s the Final Fatal Blow

Psychology kills more deals than economics.

The seller sees the broker form as:

• familiar
• standard
• already vetted
• neutral
• “the way deals are done”

So when your counsel introduces necessary protections, the seller interprets it as:

• combative
• greedy
• over-lawyered
• “changing the standard deal”
• unnecessary complexity

This dynamic is almost impossible to unwind.

The Trojan Horse isn’t the deficient contract.

It’s the illusion that it is fair.

THE BOTTOM LINE (NO GREY AREA)

**Brokers Who Provide Purchase Agreements Are Practicing Law Without a License.

They Are Not Neutral.
And They Do Not Represent You.**

Your interests and the broker’s interests are not aligned.

A broker giving you a purchase agreement is not “helping.”
It is not “saving time.”
It is not “reducing fees.”

It is engineering a path of least resistance to their commission,
no matter how much legal risk they transfer onto you.

Here is the rule:

Never use a broker-drafted purchase agreement.
If they insist — walk away.

A broker who pressures you here is revealing their true priorities:

• They want control.
• They want speed.
• They want the commission locked in.
• They do not care about your legal exposure.

This is not someone you go into business with.

Ever.

What's your experience been with brokers pushing their form agreements on you?

If you haven't encountered this yet, you will.

Except, now you're equipped to see it for the Trojan Horse it is, and stop it at the gate.

-Eric

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