In M&A transactions, lawyers are naturally inclined to draft and negotiate agreements that put our clients in a strong legal position. That is our job.

For a buyer, it may mean providing for the following in the sale and purchase agreement (SPA):
– solid representations and warranties by the seller
– specific indemnities from the seller to cover known potential liabilities
– retention of part of the consideration when there may be potential claim against the target
– having payment terms which commensurate with the risk of the transaction
– favourable remedies or exit clauses in the event of seller’s breach of the SPA

For a seller, is may mean providing for the following in the SPA:
– exclusion or limitation of the seller’s liability
– early payment of consideration by the purchaser

Sometimes, clients may choose a less favourable legal position notwithstanding the legal advice given. It after giving clear advice on the implications and clients decide to proceed with the less favourable legal position, it is also our job to accept that and facilitate the transactions on this basis.

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#mergersandacquisitions

This post was first posted on Linkedin on 13 November 2022.