Privity of contract in drafting

When drafting an agreement, obligation should not be imposed on anyone who is not a party to the agreement.

For example, in a share sale and purchase agreement, obligation should not be imposed on a company secretary (who is not a party to the SPA) to provide directors’ resolution of a company.

This is because the company secretary is not contractually bound under the SPA.

The parties to the SPA would not have recourse under the SPA against the company secretary if the obligation is not fulfilled.

Instead of: “The company secretary of the Company shall provide a certified true copy of the directors’ resolution of the Company…”

the drafting should be something along this line:

“The Seller shall procure the company secretary of the Company to provide a certified true copy of the directors’ resolution of the Company…”

#malaysiancorporatelawyer

#contractdrafting

#mergersandacquisitions

This post was first posted on Linkedin on 11 October 2021.

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 …

Lawyering
Being a Corporate Lawyer: Why I Do What I Do

After years of demanding schedule and juggling simultaneous corporate exercises which take a toll on physical and mental health, it is not surprising that some corporate lawyers experience burnout. Unlike some legal practice areas, the work of a corporate lawyer may not seem immediately impactful or “make a difference” to …