Broker-Drafted Purchase Agreement?
Read This Before You Sign

Who the Broker Actually Works For

A business broker is typically engaged under a listing agreement signed with the seller, and the broker's commission is paid by the seller at closing, usually as a percentage of the sale price. That fee structure creates a straightforward incentive: the broker gets paid when the deal closes, and closing faster, at a higher price, generally serves the broker's interest more directly than it serves a buyer's interest in favorable terms. In most states, this is reflected in the broker's actual fiduciary duty, which runs to the seller as the listing client, not to the buyer, regardless of how helpful the broker is throughout the process.

Some states permit limited or transactional dual agency, where a broker can technically represent both sides of a single transaction under disclosed terms. Even under those arrangements, the broker's compensation is tied to the transaction closing on the terms presented, not to negotiating the buyer into a better position. A friendly, professional broker and a broker who represents your interests as a buyer are two different things, and it is worth holding both ideas at once. Nothing here suggests the broker is acting in bad faith. It means the standard form the broker hands you was not built with your specific risk in mind.

The "Standard Office Form" Trap

Almost every business brokerage uses a standard form, an adhesion-style template reused across every listing the office represents, for the offer agreement and often for the letter of intent as well. These forms exist for a good reason: they let a broker move a deal forward quickly without drafting a new document from scratch for every buyer. The tradeoff is that the form was not written around your financing structure, your entity, or the specific business you are buying. It was written to be signed quickly, by any buyer, on any listing.

Brokers push for a quick signature for reasons that are not necessarily adversarial to you. A signed offer gives the seller something concrete to evaluate, it keeps deal momentum before another buyer surfaces, and it moves the transaction toward the commission event. But "quick" and "protective of the buyer" are not the same goal, and a form built for speed tends to underwrite risk in the broker's and seller's favor by default, not through any specific bad intent. Treating the standard form as a formality, rather than the first negotiated document in the deal, is where buyers give up the most leverage for the least reason.

What Broker Forms Consistently Underwrite for Buyers

These are the provisions that show up thin, missing, or drafted against the buyer's interest most often across broker-prepared offer forms, LOIs, and, on the rarer occasions a broker drafts one, full purchase agreements. Not every provision below appears in every document; a short offer form will not include disclosure schedules, for instance. The pattern holds regardless of stage: whatever protection is missing tends to be missing because the form was not built to include it, not because your deal does not need it.

Offer Form, LOI, or Purchase Agreement: When Each One Binds You

Buyers frequently do not know which document they are actually holding, because broker offices sometimes use these terms interchangeably. The distinction matters because each document binds you differently, and your leverage to change unfavorable terms drops at each stage. The broker's standard offer agreement is usually the first document, two to five pages, mostly non-binding as to price and structure, though earnest money and broker commission terms inside it often do bind on signing. The letter of intent follows, adding exclusivity and a defined due diligence period, still mostly non-binding on deal terms but with real teeth in a handful of provisions. The purchase agreement is the definitive, fully binding contract. For a full breakdown of what to check at the offer stage specifically, see the business purchase agreement attorney page. If your document is the LOI, see the contract negotiation services page for how that negotiation typically runs. And for a clause-by-clause walkthrough of the definitive purchase agreement itself, see the deeper business purchase agreement guide.

Broker-Drafted SPA vs. Attorney-Drafted: What Gets Missed in Stock Deals

It is unusual, but it happens: a broker, rather than either party's attorney, produces the first full draft of the actual stock purchase agreement. This is a materially different risk than a broker-drafted offer form, and it deserves more scrutiny, not less, because of what a stock deal structurally does.

In an asset purchase, the buyer generally acquires a defined list of assets, and liabilities not expressly assumed typically stay with the seller's entity. In a stock purchase, the buyer acquires the entity itself, meaning the entity's full liability history, known and unknown, comes along with it unless the agreement's representations, indemnification, and disclosure schedules are drafted specifically to allocate and cap that risk. This is the entire function of a properly drafted SPA: it is the mechanism that protects a stock buyer from liabilities the seller's own entity accumulated before the sale, tax exposure, pending claims, contract breaches, and undisclosed obligations among them.

A broker's template is not built to do this. It was not designed with entity-level liability transfer in mind, because that is a legal risk-allocation function, not a deal-facilitation function. A broker-drafted SPA that looks complete on its face, with sections labeled representations, warranties, and indemnification, can still leave the actual protective language thin or generic where a stock deal specifically needs it to be precise. Reviewing a broker-drafted SPA is not a matter of catching a few missing clauses; it requires confirming the representation and indemnification structure actually does the job a stock purchase agreement exists to do.

How Attorney Review Works at This Stage Without Slowing the Deal

The most common reason buyers skip review at this stage is a concern that bringing in counsel now will slow the deal down or signal distrust to the seller's side. In practice, a scoped review of a broker-drafted document, whether it is the offer form or the SPA itself, does not have to be the bottleneck.

A short offer form or LOI review can typically be turned around within a few business days once the document and basic deal facts are provided. A full purchase agreement, particularly one with disclosure schedules attached, takes longer, but the initial redline is usually the fastest part; the negotiation rounds that follow tend to take more calendar time, and those rounds happen regardless of who drafted the first version. Engagements at this stage are scoped and quoted as not-to-exceed proposals before any work begins, so you know the ceiling on cost up front.

The realistic way to avoid slowing the deal down is not to skip review. It is to bring counsel in as soon as the broker sends the document, rather than after you have already told the seller's side you are ready to sign.

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