Why Agreement Is Not a Substitute for Legal Due Diligence
In my previous post, I proposed alternatives for buyers facing budget constraints in conducting legal due diligence, including obtaining robust representations and warranties from sellers in sale and purchase agreements. However, buyers should note that contractual protection is not a substitute for legal due diligence for the following reasons: The …
Why You Need a Separate Subscription Agreement from a Shareholders’ Agreement?
Should/ could a subscription agreement be combined with a shareholders’ agreement? While it’s possible to combine the two agreements, I prefer to have a subscription agreement separate from a shareholders’ agreement for the following reasons: The parties to the agreements are different. The subscription agreement primarily involves the company which …
M&A: Key points to look out for in contracts entered by target companies
In an M&A transaction, it is important for a buyer to understand the contractual rights and obligations binding the target company under the contracts entered by the target company. However, the contracts may be voluminous and it is easy to get drowned in the details. Some key points to look …
Is it your intention to be bound by the terms?
It is a common practice in certain sectors where parties enter into a short form agreement, typically a letter of offer or letter of award which requires the parties to enter into an agreement within a specified period of time. The second agreement sets out the detailed terms and conditions. …
Are you entering into agreement with the right party?
In the course of reviewing agreements prepared by others during due diligence, I come across agreements which raise the question of who are the actual parties to the agreements. In such instance, different parties are set out in the section relating to the details of the parties and the signing …
Sign only if you wish to be bound
It is a common practice in certain sectors where parties enter into a short form agreement, typically a letter of offer or letter of award which requires the parties to enter into an agreement within a specified period of time. The second agreement sets out the detailed terms and conditions. …
A practical consideration for Business Day
When parties carry out their obligations under an agreement, they may be able to carry out the obligations only on a working day. This is usually achieved by providing in the agreement that the obligations would be done on a “Business Day”. A typical definition of “Business Day” provides that …
Who should be parties to the agreement?
I occasionally come across the following oversight in shareholders’ agreements and joint venture agreements. Scenario 1 The cover page and signing page of the agreement state that the parties to the agreement are Party A and Party B only. However, the recital states Party A, Party B and the company …
Defined terms in agreements
When drafting or reviewing an agreement, it is important to check the defined terms carefully. I have seen a sale and purchase agreement (“SPA”) for a M&A transaction which defined the term “Company” twice. It was first defined in the definition section in clause 1 to refer to the company …