Be clear with timeline in M&A SPA

Drafting

Today’s post is on interpretation of time in a sale and purchase agreement for M&A transaction.

Consider the following clause:

“The Seller shall fulfil the Conditions Precedent no later than 90 days from the date of this Agreement.”

Questions for you to consider:

1. Do the 90 days stated in the clause above commence on the date of the agreement or the day after?

2. If the last day of the 90 days’ period fall on a non-working day where the parties are located (typically defined as “Business Day” in SPA), what is the implication?

To avoid any ambiguity as to when a timeline starts or stops in a sale and purchase agreement, it would be wise to include clear interpretation clauses in the agreement to address the questions above.

Example:
Where an act is required to be done within a specified number of days after or from a specified date, the period is exclusive of the date so specified and if any period of time falls on a day which is not a Business Day, then that period is deemed to only expire on the next Business Day.

#malaysiancorporatelawyer
#mergersandacquisitions
#contractdrafting

First posted on Linkedin on 3 December 2021.

Linkedin Post
M&A: What you need to consider for sale and purchase agreement

Before diving headlong into drafting the sale and purchase agreement for an M&A transaction, take some time to understand the business of the target company and the regulatory framework in which it operates. Consider the following: 1. 𝗕𝘂𝘀𝗶𝗻𝗲𝘀𝘀 𝗔𝗰𝘁𝗶𝘃𝗶𝘁𝗶𝗲𝘀: What are the business activities of the target company? What products or …

Linkedin Post
Five key steps for legal due diligence

Most lawyers are good at identifying issues, but legal due diligence shouldn’t be limited to merely reviewing documents and identifying issues. Here are my five steps for conducting legal due diligence: 1. Identify the issues based on the scope of legal due diligence as agreed with the clients. 2. Provide recommendations …

Linkedin Post
Begin with the end in mind: Post-completion integration

I once worked on an M&A deal that took more than a year to complete. While the deal was not inherently complex, it dragged on due to delays in finalizing the details of the transaction agreements for reason beyond my control. As the deal involved a larger corporation acquiring a …