A prospective buyer will audit our employment contracts and intellectual property assignments. How do we clean up our past contractor agreements and employee NDAs today to prevent last-minute deal renegotiations?

Question

Tyler Smith · Accepted Answer

Incomplete or poorly drafted employment contracts and intellectual property agreements are a frequent cause of deal delays and price reductions during due diligence. If your past developers, contractors, or employees did not sign clear work-for-hire agreements, a buyer may worry that you do not actually own the code, designs, or processes that drive your business. To prevent this, you must run a thorough audit of your HR files immediately. Task your HR or finance seat with reviewing every current and former employee and contractor record. Verify that every individual has a signed, legally binding agreement that covers non-disclosure, non-solicitation, and a clear assignment of intellectual property rights. If you find gaps, you must address them systematically. Do not wait for due diligence to begin. Reach out to current employees and contractors to have them sign updated, comprehensive agreements as part of their annual review or compliance updates. For critical former contractors where records are missing, work with your legal counsel to obtain retroactive intellectual property assignments. Having a clean, organized compliance binder ready for a buyer's legal team proves that your operations are legally sound, reduces transaction friction, and prevents the buyer from using missing documentation as leverage to renegotiate the deal terms.