Trying to Keep the Deal Alive — Where Concerns Are Acknowledged But Not Acted On

In many property transactions, concerns do arise before a contract is signed.

Reports may be obtained, discussions may take place, and issues may be identified during the course of reviewing the property or the terms of the transaction.

What often changes is not the information itself, but how that information is approached.

Once time, effort, and expectation have been invested into a transaction, stepping away can become increasingly difficult. The focus can begin to shift, not intentionally, but gradually, from assessing the position to preserving the opportunity to proceed.

Concerns that are identified may then be treated as matters to work through rather than factors that should influence whether the transaction should proceed at all.

Issues may be reframed as manageable, acceptable in the circumstances, or outweighed by the benefit of securing the property. This position can occur even where the issues were not anticipated or where the risk is clearly identifiable.

The difficulty is not that issues arise. Most transactions involve some level of complexity. The concern is where the existence of those issues does not materially affect the decision that follows.

In that situation, the outcome is not being driven by the position that has been identified, but by the intention to continue the transaction.

This can lead to acceptance of terms that may not otherwise have been accepted, limited reconsideration of the overall position, and increased exposure once the contract has been entered into.

Where difficulties arise later, it is often not because the issue was unknown. It is because it was identified, but did not change the decision to proceed.