In the delicate and rigorous process of consummating a deal, a failure to resolve all details on the front end of the process can eventually put a deal in jeopardy, or even kill it. For example …  

A number of years ago we signed a letter of intent for a large harness company to acquire a smaller wire harness manufacturer. After all parties had seemingly moved smoothly through the due diligence process, an issue surfaced that had been discussed on the front end but never documented. It had been understood that two key employees needed to sign agreements that would not only outline the terms of their continuing employment, but also serve as a non-compete, preventing them from moving to a competitive situation for a full year after closing. 

Two weeks before the scheduled closing, one of the two individuals required to sign an employment agreement indicated he would not sign it unless he received a sizable wage increase and a guaranteed bonus. As it turned out, the amount of money he was seeking was a minuscule percent of the overall purchase price, so the dollars involved were not a major snag. But the last-minute change would have required altering the wage structure for all salaried employees. And this employee was key to the operation, so it was absolutely necessary to find a solution.  

For a few days it appeared as though this one issue could kill the deal in the eleventh hour. Then, fortunately, the seller offered a solution: Understanding that providing a wage increase to this employee could require modifying the wage structure for all salaried employees, he suggested meeting the employee’s request as a cash bonus in the closing out of his proceeds. This arrangement saved the day because the owner had represented at the outset that the two key employees would have no problem signing an employment agreement at their current salaries.

All the stress associated with the last-minute solution would have been avoided if the issue had been dealt with and put to bed on the front end of the deal.