Use precedents wisely
Precedents are great. Lawyers don’t have to reinvent the wheel each time we draft legal documents when we have precedents. However, it doesn’t mean that we can just change the parties’ names and the signing pages for agreements when we use precedents. It doesn’t mean merely cutting and pasting clauses …
Three simple ways for clear drafting
1. Use headers to structure your content Let the readers know what the content is about by using headers. When the readers come to the end of a paragraph, the next header inform the readers that you are moving to the next point. 2. Use list and numbering I am …
Make consequential amendments when amending drafts
Make consequential amendments when amending drafts. It seems obvious but sometimes the draftsperson forgets or misses out consequential amendments when amending draft documents. When amending draft agreement, circular or prospectus, you should also make amendments which are consequential to the amendments you are seeking to make. For example, if you …
Three stages in drafting M&A SPA
I learn drafting sale and purchase agreement (SPA) for M&A in the “traditional” manner. This is probably how instructions are given to associates when they are asked to draft SPA. *** We are acting for ABC who wants to buy/sell shares in XYZ Company. [Some briefing on the transaction.] Please …
Be clear with timeline in M&A SPA
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 …
Define terms in M&A SPA to avoid dispute
Today’s post is on some of the terms used in sale and purchase agreements for M&A transactions. The following terms are open to interpretation if used in agreements without being defined: 1. Family Does “family” mean immediate family or extended family? Do the parties to the agreements intend for the …
Three mistakes to avoid when drafting defined terms
I remember the difficulties I had in drafting defined terms for contracts in drafting class. I tried to be as precise as possible. I fretted over where to place (“[defined term]”) in a contract. The meaning might change depending on where I put (“[defined term]”) within a sentence. In actual …
Be careful with the word “notwithstanding”
Be careful when using the word “notwithstanding” in an agreement. Say you are preparing a supplemental agreement to substitute a clause. The substitution clause set out the rights of holders of a class of shares. You double check and triple check the substitution clause to ensure it contains all the …
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 …
Shareholders’ agreement for minority shareholders
Today’s post is about provisions in shareholders’ agreement for the benefit of minority shareholders. It is common to have a shareholders’ agreement when an M&A transaction results in more than one shareholder in the target company. Some provisions to include in a shareholders’ agreement for the benefit of a minority …