Lawyer vs lawyer in farm sales

That's particularly so when corporate, private equity or international buyers are scoping a deal and, Mr Fisken said, those lawyers were looking for chinks in the armour of any farm business on the market.

In most cases, such buyers began with offering indicative pricing before they did their full due diligence.

"One of the reasons they do that full due diligence is basically to kick you down on the price that they've put upfront," Mr Fisken said.

"You want to make sure that they know where the skeletons are early in the piece so later down the track they can't say, 'Oh, we offered you $100 million, but we've discovered XYZ problems and now it's only 40.'.

"You don't want to be in that situation because you might have let other good potential buyers go."

READ MORE: Timing tips for buying and selling farms

The issues raised by legal teams representing buyers could be incredibly varied, from share certificates all the way through to planning permits.

Mr Fisken said the best form of defence was to allow enough time to have experts forensically inspect the business and its assets before the property was marketed.

"I think people should steel themselves for up to a year and a half from when they make the decision to when money would be in their bank account," he said.

"Every business has its needles, even huge multinational businesses aren't fully compliant with all laws all the time.

"Having people come in who act for you will find things you can fix up quite quickly and easily to make your business more attractive."

Issues that were more difficult to resolve were still better revealed early.

"You'll have a plan to show how you're addressing it so you can have an intelligent discussion with them rather than having a lawyer springing something on you that you'd never thought about," Mr Fisken said.

Even if there was no legal requirement to disclose potential problems, he said most standard contracts required vendors to make undertakings about compliance.

"If there's a problem and you sign a contract saying you've obtained all necessary permits, there is the likelihood you'll be taken to court and you might have some or all of the purchase price you received taken back, which is not a great situation because then you're left with no money and no farm or no agribusiness," Mr Fisken said.

Compared with most Australian, United Kingdom or Asian contracts, North American standard arrangements were particularly stringent, he said.

"North American-style deals are much more buyer-friendly, they will expect you to give promises and structure a deal in a way that if you were dealing with someone from Australia or someone from another country, you might feel quite uncomfortable with," Mr Fisken said.

"North American deals often have contracts that are almost unreadable to the Australian eye."

It was, he said, very common for North American purchasers to require indemnification for any breach, however small.

"Basically, every time they suffer $1 of loss because you've breached your contract, they want to get that dollar back from you," Mr Fisken said.

"The other thing that is quite common with North American deals is that you'll have those 10 or 20 pages of promises, but then they will want you to go through each one with a fine tooth comb and say, in clause x, we promised we had all permits necessary, but you should be aware that we don't have a permit for the shed in the back paddock or the dog kennel."

To help mitigate the risk of a claim, Mr Fisken said many clients were choosing to take out specialist warranty and indemnity insurance.

Managing legal costs in such complex negotiations could also be eased somewhat, he said, by the increasingly common practice of offering lawyers a monthly retainer fee that merely covered costs plus a success fee based on a certain sale price being achieved.

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