In the context of share purchase contracts (“PSPs”), sellers are subject to numerous contractual and guaranteed assurances to buyers about the nature of the business to be acquired. The compensation clauses provided by the BSB protect the buyer from the violation of the seller`s insurance and guarantees as a means of assigning risks and liabilities. This newsletter examines, among other things, the seller`s obligation to compensate the buyer, ways to limit the seller`s liability, cases where such restrictions do not apply, third-party claims, the buyer`s obligation to reduce damages and the prohibition of double recovery. The seller`s liability under the GSB is removed with respect to claims that were notified to him after the expiry of these deadlines, without the need for a response or notification. In addition, the BSB and others who are not responsible for the seller may be held liable if notification of the claim in question comes at a time when the aid company is no longer a subsidiary of the buyer. Under the BSG, the buyer may, at the seller`s request, authorize the seller to take charge of the case or the legal proceedings and to defend the right of third parties on behalf of the buyer and/or the company by his own legal representatives and at his own expense. The buyer may also decide, at his sole discretion, to participate in the case or the proceedings. If the case is executed by the seller, the buyer should and should provide the company with all the necessary information, documents and assistance and give access to the company`s premises, accounts, registrations, etc., so that the seller can provide the necessary defense. If the defence is not taken over by the seller and is therefore executed by the buyer, the seller is required to provide the requested information. The BSP also stipulates that the buyer is not authorized and does not advertise without the seller`s prior written consent. Guarantees in stock or asset purchase contracts are generally broad.
They make a series of assertions about property status, labour and labour law, processes, asset status, accounting and operating systems. Finally, indemnification clauses govern cases where the seller is not held responsible for the buyer`s claims. To the extent that the debt is the result of a deed, omission or transaction of the buyer after the reference date or, if necessary, is increased by the creation or, if necessary, the increase in the fee; (ii) any change in the law or its generally accepted interpretation, including new taxes after the reference date; (iii) a breach by the purchaser of its obligations under the GSS; (iv) an act or omission by the seller that was made at the buyer`s request; (v) cases, facts or circumstances that were disclosed to the purchaser in the data room, in the accounts or elsewhere, or that were publicly available prior to the signing of the G.S.O.; (vi) matters for which a provision or surcharge has been granted in the company`s accounts as served on the purchaser. Where claims, allegations or actions of a third party, including administrative authorities designated as third parties under GNP, give rise to a cause, fact or circumstance that may result in the seller`s liability, BSAB generally requires that the purchaser and/or dependent company notify the seller in writing within a specified period of time following notification of the case, fact or circumstances.