Commercial Purchase Agreement Red Flags: A Buyer’s Checklist
A fast checklist of the clauses that most often disadvantage a buyer in a commercial purchase and sale agreement.
Last reviewed: May 26, 2026 by the BizLeaseCheck Editorial Team
General information, not legal advice.
Overview
Most of the risk in a commercial PSA clusters in a handful of clauses. This checklist links the deeper guides so you can spot the issues quickly and decide what to negotiate before you sign.
It is written from the buyer’s side, but a seller can read it in reverse — the same clauses a buyer flags are the protections a seller is trying to keep.
Topics to check
A deposit that goes hard on signing rather than after due diligence; additional non-refundable deposits at milestones; a very short or non-extendable due-diligence period; deemed-waiver mechanics that turn silence into a commitment; and no financing contingency when the buyer needs a loan.
Each of these compresses the buyer’s ability to investigate and walk. Confirm the calendar and the deposit triggers first.
A broad AS-IS release that waives even fraud or surviving representations; no time or right to complete a Phase I environmental assessment; an objection-and-cure clause that lets the seller decline to cure anything; overbroad "permitted exceptions"; and representations that do not survive closing.
These shift condition and title risk to the buyer. Preserve diligence time, a real cure right, and a few surviving representations.
A seller-default remedy capped at return of the deposit (no specific performance); buyer default exposing more than the deposit; time-of-the-essence with no extension rights; a one-sided "buyer pays all closing costs" clause; and, for tenanted property, no estoppel/SNDA closing condition.
These decide who wins if the deal breaks and who pays at the table. Balance the remedies and confirm the closing conditions before signing.
Key takeaways
- Money/timing: hard deposit on signing, short diligence, deemed waiver, no financing contingency.
- Condition/title: broad AS-IS release, no Phase I time, seller may decline to cure, non-surviving reps.
- Remedies: deposit-only seller-default cap, uncapped buyer exposure, time-of-the-essence with no extensions.
- Closing: one-sided cost allocation; missing estoppel/SNDA conditions for tenanted property.
- Read it from your side and build a short negotiation list before signing.
Official resources
Legal-review notes
Guide confidence marker: Medium confidence.
- This checklist is general issue-spotting, not jurisdiction-specific legal conclusions.
- Enforceability of AS-IS releases, liquidated damages, and specific performance varies by state; confirm with counsel.
Frequently asked questions
What is the single biggest red flag in a commercial purchase agreement?
There is no single one, but a deposit that goes hard immediately combined with a short due-diligence period and no financing contingency is a common and dangerous combination — it commits the buyer before it can investigate or secure funding.
How do I use this checklist?
Read the contract once for the calendar and deposit triggers, once for condition and title, and once for remedies and closing. Flag anything on this list, then read the linked guide for the specific clause and decide what to negotiate.
Is a one-sided contract normal?
Seller and buyer forms each start one-sided; that is expected. The point of review is to identify the imbalances that matter for your side and negotiate the ones with real dollar or risk consequences before you sign.