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Negotiation Of Clauses Comparison Chart Notes

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Negotiation of Clauses Original Wording Reliance on representations

Buyer would be able to claim under misrepresentation for any representations or statements made in the agreement

Ability to bring a tortious claim (reliance on representations) where damages is more favourable to the buyer and there is the ability to rescind the contract

Tortious damages are to put the buyer in the position he would have been in had the harm not occurred, and do not need to mitigate loss (need to prove inducement and reliance) Not there

New Wording Deletion of representations

Buyer accepting that it has not relied on any representations and therefore reducing the ability to bring a tortious claim

Can only bring a contract claim where there is no ability to rescind and there is a duty for the buyer to mitigate their loss and can bring a claim for damages (must be breach and causation) only to put them in the position they would have been in had the contract been properly performed

Better wording for the seller would be to even remove in reliance on the

Compromise This is already a compromise, seller has kept in in reliance on and the buyer hasn't include the phrase and inducement

Entire Agreement Clause

Can only claim for misrepresentation on the warranties in the agreement - Entire Agreement Clause

Limiting liability to exclude any outside statements or oral statements Not there Removing Rescission as a remedy Can only claim for damages rather than claim rescission or termination of the agreement after completion Jointly & severally Removal of Joint & Several and replace Buyer would be able to sue any 'sellers' with 'warrantors' seller for the whole amount

Sellers are limiting their liability as the and not the buyer's concern minor shareholders and the trustees are highly how the sellers would sort it unlikely to be willing to be liable for the full out amount, but rather only for their amount

Define Warrantors

Heavily linked to Clause 18 of the main agreement. If clause 18 if kept in the main agreement then clause 2.5 isn't so necessary

Represent and warrant Buyer wants the widest possible range of remedies including misrepresentation Full and fair disclosure with sufficient details

Achieve high standard of disclosure

New Hearts - want sellers to provide the buyers will all information

Farin - "save as

Deletion of represent and warrant Exclude claims for misrepresentation Deleted full limiting the extent of disclosure Deleted with sufficient details and added disclosure bundle

Again limiting disclosure obligations - pushing risk and obligation to review the disclosure bundle on to buyer

Allocation of risk to the buyer

Seller trying to drag the burden of

Only make specific warranties as clear representations and all the rest are contractual terms

Sellers cannot really remove joint & several

Deed of Contribution (Side agreement) Limiting liability to the amount of consideration that the sellers themselves received

Cannot advise conflicting sellers Put back in and emphasis entire agreement clause

The word fair has been kept in but the buyer is likely to insist upon full disclosure

Whatever standard of disclosure you agree will be the level that the courts apply -

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