When a company completes a merger or acquisition, it can end up being saddled with the legal problems of the business it just acquired. Buyers need to be able to assess the legal liabilities of their acquisition targets and figure out how to either avoid them or lessen their impact.

Karen C. McConnell, leader of Ballard Spahr’s Mergers and Acquisitions/Private Equity Group, said one way buyers can protect themselves is to purchase specific assets that don’t carry any liability. She cautioned, however, that this strategy is only an option when the buyers and sellers are both private companies, or a public company is acquiring a private company.

“The problem with a merger or a stock purchase is that the entirety of the [target] company goes in the transaction—good, bad, and ugly,” Ms. McConnell said. “There is nothing you can do to avoid that liability—the only thing you can do is try to draft around the liability.”