I Cut, You Choose: Key Considerations in Drafting Deadlock Provisions

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by Jennifer L. Villier, JD | Legal Education Faculty, WealthCounsel

Any 50/50 business relationship can be tricky. The possibility of deadlock is real, and often a primary reason for avoiding equal joint ventures. With a properly drafted buy-sell agreement, however, equal owners can protect themselves from conflict and other triggering events that may lead to the sale or dissolution of the business. Deadlock provisions, known by a handful of colorful names can be drafted to address any foreseeable dispute between owners. While death, divorce, disability, and other circumstances can trigger a buyout, this article focuses on owner stalemate.

There are several issues the attorney should consider when drafting the deadlock provisions. Read this brief to learn what they are and help your clients avoid headaches later.