Should I fix my messy contracts before I even think about selling?
Generally yes, and earlier is better than owners usually expect, because messy contracts are one of the first things due diligence surfaces, and fixing them under a buyer's timeline is far harder than fixing them on your own. "Messy" usually covers a few common problems: contracts that were never signed by both parties, agreements that have quietly expired but the relationship continued anyway, verbal understandings with key suppliers or customers that were never written down, and contracts that don't clearly say what happens if the business is sold.
The nuance is that fixing contracts before a sale isn't just administrative tidiness — some contracts contain clauses that directly affect whether they can transfer to a buyer at all, such as requiring the other party's consent before an assignment. Discovering that a key customer or supplier contract can't transfer without consent is far better handled quietly, on your own schedule, than in the middle of a live deal when a buyer's lawyers flag it.
Reviewing your material contracts with a business lawyer before you start talking to buyers lets you renew, formalize, or renegotiate problem agreements while you still have the leverage and time to do it properly.
Key takeaways
- Messy contracts are among the first things a buyer's due diligence will surface.
- Common problems include unsigned agreements, lapsed terms, and undocumented verbal deals.
- Some contracts require consent to transfer, which is better discovered before a deal is live.
- Review and fix key contracts with a lawyer before approaching buyers, not during due diligence.