GERMANY 42 Finance Monthly Global Awards 2024. When it comes to the drafting, negotiating, and processing of purchase contracts, what key factors do you consider to ensure that the contracts reflect the due diligence findings and safeguard your clients’ interests? These factors include: Detailed representation of assets and liabilities: The purchase agreement should contain an accurate and detailed statement of all assets and liabilities to be transferred. The results of the due diligence can help to identify unclear or potentially problematic aspects that need to be addressed in the negotiations and in the contract text. Adjustment of the purchase price: Based on the due diligence results, it may be necessary to adjust the purchase price to take account of any risks, identified defects or future liabilities. Mechanisms such as earnouts can also be agreed in order to link the purchase price to the future performance of the company. Guarantees and warranties: The seller should provide comprehensive warranties and guarantees regarding the accuracy of the information provided and the absence of hidden defects. These clauses should be specific to the findings of the due diligence and protect the buyer from unknown risks. Indemnities and limitations of liability: Indemnification clauses are critical to protect the buyer from future liability claims arising from prepurchase activities. At the same time, limitations of liability can be agreed to limit the seller’s exposure. Provisions for disputes: The contract should contain clear procedures for resolving disputes that may arise from the interpretation or application of the contract. This may include arbitration, mediation or other forms of dispute resolution. Compliance and regulatory approvals: The contract must ensure that all necessary regulatory approvals are obtained and compliance requirements are met. This also includes consideration of the results of legal due diligence with regard to regulatory risks. Transition and integration plans: For a smooth takeover, it is important to include detailed plans for the transition phase and the integration of the company’s activities in the purchase agreement. This includes provisions regarding personnel, IT systems and other operational aspects. Protection of intellectual property and other key resources: The agreement should ensure the protection and transfer of intellectual property and other critical resources and secrets of the target company. Clarity and precision: To avoid misunderstandings and later disputes, it is important that the contract is clear and precise. Each section should clearly define what is covered and clearly set out the terms and obligations of the parties. comprehensive advice that includes both project development-related aspects and other relevant areas of property law is crucial.
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