Available as an in-house course             
 
Course Overview

A “good deal” is a function of both the terms under which exchange of contracts takes place and the price paid or received on completion of a sale and purchase agreement.

A high price is no good to a seller if a large portion of the proceeds of sale needs subsequently to be handed back to a buyer in order to cover breaches of warranty. Similarly, a low price is not particularly advantageous to a purchaser if the assets acquired prove to be subject to unexpected defects for which no redress is enforceable against the seller.

The negotiation of a sale and purchase agreement seeks to ensure that a buyer receives what was anticipated and that a seller can walk away with confidence that its continuing liabilities are both known and quantifiable.

As a compromise between these two extremes, the drafting of warranties and indemnities identifies the risks in a deal and decides upon whom they should fall.

Course Content

Structure of the agreement
Parties, interpretation and definitions
Pre-conditions & covenants
Exchange and delayed completion
Boilerplate clauses
Schedules
Drafting objectives

Representations, warranties and indemnities
Purpose and scope of warranties
Transfer and re-transfer of risk
Warranties given by the buyer
Long and short form warranties
Purpose of indemnities
Rescission or damages?

Warrantors & covenantors
Who should give warranties?
• Executive shareholders
• Management buyouts
• Receivers & administrators
• Listed companies
Who can enforce warranties?
Limitations & exclusions
Interregnum provisions
Specific clauses to negotiate

Completion meetings
Management of the meeting
Comfort letters & side letters
Solicitors’ undertakings
Timing problems

Disclosure letters
Reasons for disclosure
Disclosure letters
General & specific disclosures
Warrant disclosure letters or due diligence reports?
Fair disclosure
Deliberate non disclosure

Property warranties
Investigation, certificate or warranties?
Scope of protection
Good and marketable title
Short form & long form warranties

Tax warranties
Areas to cover
The tax deed
Effect of indemnities
Limitation of claims

Completion accounts
Comparison to audited accounts
When and why they are used
Principal mechanisms
Limit areas of potential dispute
Advantages & disadvantages
Locked box transactions
Completion