Provided by: Jennifer Kirschenbaum, Esq.
April 5, 2018
I am interested in purchasing a practice and the owner asked me to pay a non refundable deposit before I can look at his books. Do I do it? What do you think?
The practical answer first - depends how bad you want the practice and if you really have to pay it to be in the running. The less business-focus answer - NO! you don't agree to it or pay it without conditions - such as, if seller backs out for no reason, you get it back. Non-refundable on its face means you don't get the money back, no matter what. Well, a lot of the "no matter what" may have nothing to do with your interest or your ability to purchase (both of which the seller may have legitimate business reasons to take a deposit against non-performance. It's not unreasonable for a seller to want to defray costs (actual and inferred based on their time) they spend vetting and working to finalize a deal with you, however, as you hear frequently from me, the devil is in the details.
Don't pay or sign without having the language reviewed. It's time to "lawyer up".