For buyers and sellers alike, there is nothing more frustrating than the wasted time, cost and effort of a transaction which does not proceed because a party fails to manage their exposure under existing contractual arrangements. For this reason, it is essential that both parties comprehensively understand the assets and commitments the subject of a proposed transaction, so as to avoid missing contract red flags or misunderstanding an existing contractual framework.
In this article, we look at the key considerations for both sellers and buyers:
- so as to avoid transactions falling over because a project or asset is governed or affected by ‘dodgy’ documents or contractual arrangements
- to manage risk under existing ‘dodgy’ documents whether by, in the case of the seller, achieving a clean exit or, in the case of the buyer, ensuring only known liabilities are assumed on completion of the acquisition.