Identify Issues In Counterparty Purchase And Sale Agreement

Skill: Identify Issues in Counterparty Purchase and Sale Agreement — Issue Memorandum for Commercial Office Acquisition

1. Subject-matter triage

• This is a buyer-side issue-spotting and comparison task, not a drafting task.
• Treat the executed letter of intent, buyer playbook, and financial summaries as the controlling comparison set.
• If multiple properties, tranches, or versions are provided, enumerate them first and analyze each separately before generalizing.
• If only one asset and one draft PSA are in scope, say so affirmatively and analyze that single transaction only.

2. Failure modes the skill is correcting

• Reviewing the seller draft against generic buyer-favorable norms instead of the executed letter of intent, which misses deal-specific deviations.
• Treating the purchase agreement in isolation and failing to cross-check leases, operating data, and diligence summaries against the seller’s representations and covenants.
• Omitting buyer-playbook positions, especially mandatory protections that are not obvious from the letter of intent alone.
• Flattening all issues into one undifferentiated list, which obscures true risk and negotiation leverage.
• Describing problems without linking them to transaction size, a cross-referencing document, and the concrete buyer consequence.
• Stating legal conclusions without identifying the governing transactional principle, contract doctrine, or market-standard baseline supporting the critique.

3. Legal frameworks / domain conventions that apply

• The executed letter of intent is the deal baseline; when the seller draft departs from it, the deviation is a buyer-side issue unless later confirmed as an agreed change.
• PSA provisions typically cluster around price mechanics, earnest money, diligence access, closing conditions, title and survey, representations and warranties, covenants, indemnity, survival, caps, prorations, defaults, and remedies.
• Buyer protection usually depends on breadth of representations, the length and structure of diligence, the refundability of deposit funds, and the ability to terminate if conditions are not satisfied.
• Ordinary-course operating covenants are central in a commercial office acquisition because rent roll changes, lease amendments, abatements, concessions, and material contracts can shift underwriting before closing.
• Proration and closing-adjustment mechanics should be checked against the financial summaries and rent roll to confirm they reflect the actual income and expense profile.
• Survival and liability limitations are the principal post-closing recourse controls; narrower survival, higher knowledge qualifiers, broad disclaimers, or low caps materially reduce recovery.
• Financing contingencies, if included in the deal baseline, must be preserved with their stated conditions and deadlines; if omitted from the draft, that omission is a substantive buyer issue.
• The buyer’s playbook governs internal risk tolerance; any seller position that violates a playbook-required position should be treated as a priority negotiation item even if it is marketable elsewhere.

4. Analytical scaffolds

• Extract the economic and risk terms from the letter of intent, then compare the seller draft clause by clause against that baseline.
• Review the buyer playbook article by article and test whether the draft satisfies each required buyer position; identify any gap as an issue.
• Compare rent roll, operating expense summary, and other financial diligence materials against the draft’s representations, disclosure qualifiers, and proration language.
• Read the seller’s transmittal or markup notes for stated deal priorities, then calibrate which points are likely to move and which are likely to require escalation.
• Separate issues into clearly ranked tiers using a uniform ordinal severity scale defined once at the top of the memo.
• For each issue, include the section reference, the seller’s position, the controlling baseline, the buyer impact, and the proposed counter-position.
• Close every issue with three moves: tie it to a figure, term, or threshold from the source set; cross-reference the interacting clause or document; and state the downstream consequence for the buyer.
• Identify compounding combinations, such as a short diligence period paired with hard deposit timing, or narrow survival paired with a low liability cap.
• Where a legal proposition is invoked, cite the governing contract principle, rule, or market convention by name rather than stating the conclusion bare.

5. Vertical / structural / temporal relationships

• Treat earnest money, going-hard timing, and diligence duration as one interlocking risk structure; assess them together because they determine the buyer’s capital exposure before closing.
• Treat representations, survival, liability cap, and exclusive remedies as one post-closing recovery structure; assess them together because a weakness in one clause often magnifies the others.
• Treat rent roll, lease status, operating expenses, and prorations as one economic accuracy structure; compare the PSA text to the underlying financial summaries for consistency.
• Treat closing conditions, termination rights, and refund mechanics as one exit-right structure; if any leg is narrowed, the buyer’s ability to walk away may be impaired.
• Treat seller operating covenants and prohibited actions as the in-period control structure; analyze them against anticipated lease activity and expense approvals during the gap period.

6. Output structure conventions

• Prepare a prioritized issues memorandum in industry-conventional form, using the transaction documents as the organizing spine rather than a rubric-style checklist.
• Open with a brief executive summary identifying the highest-risk points and the overall negotiation posture.
• Define the severity scale once near the top and apply it uniformly to each issue entry.
• Organize the body by priority tier, then by agreement section or topic within each tier.
• For each entry include: section reference, concise issue description, baseline comparison, buyer impact, severity, and recommended counter-position.
• Each issue entry should be self-contained and should not rely on unstated context from other entries.
• End with a Recommended Actions block that lists concrete next steps in imperative form, identifies the responsible role, and ties each step to a transaction milestone or immediate deadline if one is available from the source documents.
• Use the filename specified in the task instructions exactly: psa-issues-memorandum.docx.