When you find an online business you want to buy, the fear of missing out (FOMO) often leads to making mistakes that can hurt you legally and financially.
In the rush to acquire the venture, it’s a common mistake to throw an informal offer at the seller verbally or in an email to the seller or the seller’s broker.
This type of offer will typically be defective because it lacks key terms designed to protect you, including your ability to walk away from the potential deal if something is wrong with the business or its financials.
For example, you might think you’re making an offer to buy some of the essential assets but the seller mistakenly believes you’re offering to buy the company’s equity (e.g., corporate stock).
And when a deal falls apart badly, that’s when lawsuits and other nasty stuff happens because either you or the seller feels cheated or deceived.
The potential damage from a blown deal can really add up if the seller turned down other offers (lost opportunity costs) based on the mistaken belief you would follow through and purchase.
To reduce the risk of this happening, it makes sense to make your offer using a non-binding letter of intent (LOI) that spells out the key details of the offer and provides you the ability to walk away (or revise your offer) if you discover something important that adversely affects the value of the business to you.
An experienced Internet business lawyer can help you create an LOI that’s designed to be a serious offer to purchase an online business while protecting your interests in the process. If you’d like help with this from Attorney Mike Young, the first step is to book a phone consultation with him.