Apr 14, 2021 / by OsmondMarketing / No Comments

Disclosures are negotiated in a separate disclosure letter from the main agreement. As a result, the responsibility for guaranteeing sales contracts appears legally or contractually. The legal guarantee is the liability arising from the absence of the expected qualifications in the product, which are subject to the sales contract, and defects that reduce its value2. Due diligence will aim to resolve all issues of concern to the buyer and to identify appropriate areas that must be covered by guarantees or allowances. These are tailored to the type of target entity or assets sold and the problems identified. Sellers are warned against the latter during the sale transaction and the buyers have assured that they have the protection of the guarantees and compensations contained in the contract to purchase assets or shares. Finally, remember that guarantees should not be taken lightly, purchasers should perform thorough due diligence, no matter how quickly an agreement is expected, and rights limitation clauses must be examined in detail and developed by experienced lawyers. If a warranty is found to be false, the purchaser may seek damages for a breach of the warranty in question, which could result in shares below their guaranteed value. When shares or commercial assets are sold, there is no automatic protection for the buyer as to the scope, quality, etc. of the things he will acquire. The only protection a buyer will have are those that are included in the sales contract. In this case, the buyer was 116 Cardamon Limited and they purchased Motorplus Limited, an insurance company that sold additional insurance policies to supplement insurance sales of engines and household products, such as covering legal costs. A recent case before the English High Court again highlighted the importance of guarantees in share purchase contracts and why they should be carefully considered before the deal is concluded, particularly if the sale is faster.

This guarantee confirms that the seller is not interested in a transaction that is in competition with or likely to become competitive with the target company. This is further protected in the share purchase agreement by the use of restrictive agreements. A charge means any charge, interest, rights or rights that interfere with the use or ability to transfer shares, for example. B security interests.