Legal due diligence produces a long report and a short list of things that actually matter, and the useful distinction is between a finding that blocks a deal and one that prices it. Most findings price: they become an indemnity, a warranty or a reduction. Two areas can genuinely block, and knowing which is which early is what keeps a process on its timetable. This page sets out five areas and marks the two.
Corporate, which can block
Whether the shares are what everybody thinks they are: the register, past transfers, options granted informally, and consents that were never obtained. A defect here is not a discount, it is a condition, and it takes as long to fix as it takes to find the people involved.
Consents and change of control, which can also block
Contracts that terminate or require consent on a change of ownership, plus any regulatory approval the transaction needs. These set the outside date, and a consent nobody identified before signing cannot be handled at all until the counterparty answers.
Contracts and commitments, which price
Customer and supplier terms, exclusivity, unusual liabilities and anything that runs longer than the buyer assumed. These become warranties and indemnities, and the negotiation is about who carries them rather than about whether the deal proceeds.
Litigation and employment, which also price
Open and threatened matters, employment classification, and any historic pattern. Reserves and indemnities handle almost all of it. The exception is a matter large enough to be existential, which is rare and obvious when it appears.
Questions people ask about legal due diligence checklist
What can actually block a deal?
Corporate defects in the share position, and consents or regulatory approvals nobody identified before signing.
How are most legal findings handled?
As warranties, indemnities or a price adjustment. The negotiation is about who carries the risk, not whether to proceed.
Why identify consents early?
Because they set the outside date, and a consent found late cannot be accelerated by anything the parties do.