A more recent version of these Buyer Or Seller Friendly Clauses Crib Sheet notes – written by Cambridge And Oxilp And College Of Law students – is available here.
The following is a more accessble plain text extract of the PDF sample above, taken from our Private Acquisitions Notes. Due to the challenges of extracting text from PDFs, it will have odd formatting:
Buyer or Seller Friendly Clauses 1) Buyer Friendly a. Reliance on representations a.i. Buyer able to claim under misrepresentation for any representations or statements made in the agreement a.ii. Ability to bring a tortious claim where damages are more favourable to the buyer and there is the ability to rescind the contract a.ii.1. Contract damages put the claimant in the position he would have been in had the contract been properly performed a.ii.2. Tort damages put the claimant in the position he would have been in had the harm not occurred - i.e. if the claimant had not entered into the contract - and there is no need to mitigate loss. Can also rescind the contract a.ii.2.a. Need to prove inducement and reliance though a.ii.3. Difference a.ii.3.a. If the correct market value for the company was paid it makes no difference if action is bought in tort or contract a.ii.3.b. If the claimant gets a good bargain then he would have suffered no loss and so will be unable to claim in tort. In contract can claim for loss of bargain a.ii.3.c. If purchase was a bad bargain - claimant paid more for the company than it was actually worth - then will be better to claim in tort b. No Entire Agreement clause b.i. Omission of this clause allows buyer to claim misrepresentation for statements made outside the agreement; including oral statements c. Include rescission as a remedy c.i. Allowing buyer to terminated the agreement after Completion and not just sue for damages d. Sellers Jointly & Severally d.i. Buyer wants to be able to sue any seller for the whole amount d.ii. Will be the seller's problem to sort out apportionments of sums owed e. Represent & Warrant e.i. Buyer wants the widest possible range of remedies including misrepresentation f. Full & Fair disclosure...with sufficient details to identify the nature and scope of the matter disclosed f.i. Including a high standard of disclosure for the seller to achieve f.i.1. New Hearts wording f.i.1.a. Want the seller to provide the buyers will all information f.i.2. Farin f.i.2.a. "save as disclosed" - disclosure must be fair f.i.2.a.i. It is not enough to leave it to the buyer to decipher the problem from a large bundle of documents f.ii. Buyer should never accept wording less than New Hearts g. Statements will be true at completion g.i. Protection of the buyer in the period between exchange and completion h. True and accurate and not misleading h.i. Buyer does not want an onerous burden of investigation h.ii. This statement flushes out information i. Into the Group Companies i.i. Disclosure is required for the whole undertaking j. Actual knowledge clause j.i. Except in relation to matters fully & fairly disclosed in the Disclosure Letter, none of the Warranties shall be treated as qualified by any actual, imputed or constructive knowledge, on the part of any member of the Purchaser's Group or any agent or
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