The twelve questions to answer before you sign

By Steven Tan, YUVORA · {TODAY} · 10 min read

Twelve questions decide whether a structural risk is still unresolved when you sign. They take about twenty minutes to work through, and each answer converts into a condition rather than a hope.

What the twelve questions are for

A structured decision review is a written, independent analysis of one pending decision: four assessment dimensions, two or three scenario paths, and the verification list that belongs in your negotiations. The twelve questions below are the short version — the same four dimensions compressed into what can be answered from a desk, without documents or a call. If four or five of them come back unresolved, that is the signal to have the decision reviewed properly: a memo is delivered in 48 hours, and a scoping request is answered within 24 hours.

The questions are grouped in the order they matter: verification, then control, then sequencing, then exit. Answering them out of order is how a deal reaches signature with the control question still open.

The twelve questions

Verification — four questions

1. Which three claims carry this decision? Write the statements that, if false, would change your answer. Everything else is context.
2. Which of those claims is evidenced, and which is promised? An evidenced claim has a document, a registry entry or a third party behind it.
3. What has to be true for the financial case to work, and who verified it independently? "The model says so" is not verification.
4. What did the counterparty decline to put in writing? That omission is usually where the structural risk sits.

Control — three questions

1. Who can block a decision at month three — by mechanism, not by title? Equal equity is not equal power; the operating agreement decides who can stop a distribution.
2. If the parties deadlock, what resolves it? A vote, a clause, an arbitrator, a court — or nothing, which is the most common answer.
3. Which decisions can you no longer make alone after signature? Hiring, borrowing, related-party transactions and asset transfers are the usual ones.

Sequencing — three questions

1. What has to be filed, consented or reported before the first payment moves? Reporting and consent obligations are the classic blockers, and they sit outside the contract.
2. Where is the first irreversible step? Everything before it is still negotiable; everything after it is a negotiation with worse terms.
3. What happens if one step slips by 30 days? Test the schedule against a slip, not against the plan.

Exit — two questions

1. How do you leave? Notice period, valuation method, and who is obliged to buy — three separate answers.
2. What does leaving cost in the first year? If the answer is "we would work it out later", the exit is untested and the cost is unknown.

How to use the answers: four steps

1. Step 1 — Mark each question answered, assumed or open. "Assumed" is the dangerous middle: it is where most agreements are lost.
2. Step 2 — Name who can close each open item, and by when. Your lawyer, your accountant, a registry search, or the counterparty — with a date attached.
3. Step 3 — Convert what cannot be verified into conditions. An unevidenced claim becomes a condition precedent, not a footnote.
4. Step 4 — Re-test after every material change. A new party, a new jurisdiction or a new payment route reopens questions you had already closed.

The structure is deliberately close to the twelve-question protocol Kahneman, Lovallo and Sibony set out for CEO-level decisions in Before You Make That Big Decision (Harvard Business Review, 2011). The difference is that answers here are written down and the assumptions are logged, so the reasoning can be checked later.

Twelve questions versus a full review

These twelve are the screening layer, not the review. A full review adds the written scenario paths, the counterparty analysis and the capital sequencing that need documents — and it is the difference between knowing which questions are open and knowing what each answer changes. Where the counterparty sits in another jurisdiction, two public references are worth having before you negotiate: the UNIDROIT Principles of International Commercial Contracts and the ICC's model contract and arbitration material (iccwbo.org). Neither substitutes for local counsel; both tell you which questions are standard enough that your lawyer should have a settled answer.

Where people get this wrong

• Answering the legal questions and skipping the control questions. A watertight contract that lets one party block every distribution is still a bad decision.
• Treating verification as a formality. Four of the twelve questions exist because a promise was filed as a fact and nobody re-checked it.
• Leaving the exit to the end. The exit is priced at entry or it is discovered later at a worse price.
• Stopping at "mostly answered". Two open questions at signature is normal; not knowing which two is not.

What to do next

If fewer than three answers are open, sign with a short conditions list and keep the notes. If four or more are open, that is the moment a written review pays for itself — the twelve questions become the skeleton of the memo, and the one follow-up exchange is answered within 72 hours of delivery.

Four dimensions behind the twelve questions

Each question belongs to one of four dimensions, and the dimensions are applied in the same order every time:

• Timing considerations — what has to happen first, and where the first irreversible step sits.
• Counterparties — interests, incentives and information gaps on the other side of the table.
• Capital and resources — what is committed, what is staged, and what is verifiable.
• Hidden and structural risk — what needs checking rather than forecasting.

A review returns a written memo covering all four, with two or three scenario paths and the verification list attached. If any question above came back "assumed", that dimension is where the memo starts.

Five questions to hand your lawyer

The twelve questions are structural, not legal. Five of them convert directly into instructions for counsel:

1. Confirm which clauses decide blocking rights, and in whose favour they operate in practice.
2. Confirm the deadlock mechanism, and whether it has ever been tested in this jurisdiction.
3. Confirm which filings, consents or reporting obligations sit outside the agreement and could block payment.
4. Confirm the valuation method on exit, and who is obliged to buy at that valuation.
5. Confirm what changes if the counterparty is replaced or restructured mid-term.

What this list is not

It is not a forecast, and it does not rank risks or assign probabilities. Nothing here depends on predicting an outcome; the questions exist to separate what is evidenced from what is assumed, and to name the points after which the decision becomes expensive to reverse.