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THE BROKER AGREEMENT
The document defining the mutual obligations, expectations, terms, and conditions of the seller/broker business relationship is called the broker agreement. Since your broker is likely to be the key business companion in your M&A journey, it is critical to draw up the agreement with the utmost care. This section will offer you invaluable advice on how to do it, but do not think this eliminates the need for a lawyer. A poorly constructed broker agreement can cause you untold headaches and stress.
If asked about the single most important component of the agreement, I would say it's termination. The contract must provide you an "out" if you find the broker is underperforming. Quite often, I've seen sellers hog-tied by an exclusivity clause, unable to break free of an unsatisfactory broker relationship.
There is no standard organization form for a broker's agreement; its layout can take many shapes. For mega deals, an engagement agreement can be 40 or 50 pages.
But virtually all agreements must cover a similar set of basic contingencies.
