Deal fatigue
Deal fatigue is the exhaustion and declining motivation that builds up in a buyer or seller as a transaction drags on through repeated rounds of due diligence, renegotiation and delay. It is a common, informal reason deals that were otherwise sound end up stalling, being renegotiated on worse terms, or falling apart entirely.
Selling or buying a small business rarely closes as quickly as either side expects at the letter of intent stage. Financing conditions, information requests, licence transfers and legal drafting all take time, and each delay chips away at enthusiasm. Deal fatigue describes what happens when that wears down a seller’s patience or a buyer’s confidence, even when nothing has actually gone wrong with the underlying business.
Why it is dangerous
A tired seller may accept unfavourable last-minute changes just to be done, or walk away from a fundamentally good deal out of frustration. A tired buyer may push for a lower price near closing, sometimes called re-trading, using the sunk time and effort against the seller. Neither reaction reflects the actual merits of the business.
How experienced parties manage it
Setting realistic timelines from the start, agreeing on an outside date for closing, and keeping communication regular rather than going silent for weeks all reduce the odds that fatigue derails an otherwise workable deal.
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Treadstone LawLegal commentaryHow Long Does It Take to Sell a Business in Ontario?
- 02Treadstone LawLegal commentaryHow Long Does Due Diligence Take When Buying a Business in Ontario?
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