| Abstract [eng] |
The Master’s thesis analyses the institution of representations and warranties in share purchase agreements as a way of transferring business. The thesis seeks to highlight the need for this institution in business practice, taking into account the problem of non-recognition of the sale and purchase of shares as a transfer of business and the fact that these transactions are not subject to the defects of the object institute. In assessing the institution of representations and warranties, particular attention is paid to the analysis of the pre-contractual duties – the seller’s duty to disclose material information and the buyer’s duty to investigate the object to be acquired. Although the seller has a duty to disclose material information, this duty is significantly reduced by the introduction of a well-established instrument of foreign business practice – due diligence – which becomes an integral part of the buyer’s duty to investigate. This thesis analyses the nature and significance of the application of this instrument in business acquisitions in the context of the legal regulation of three countries – the Republic of Lithuania, the Federal Republic of Germany and the Kingdom of the Netherlands. The work analyses the risk management options for the buyer of the shares, which, due to the non-application of the institute of defects, must be fully addressed in the contract. Accordingly, the buyer, through the institute of representations and warranties, establishes specific indicators of the company’s condition, the non-compliance of which with the terms of the contract gives the buyer the right to bring claims against the seller. This thesis also discusses contractual instruments common in practice, such as limitations of liability, definitions of the parties’ “knowledge“ and other contractual clauses, which, due to the predominance of arbitration clauses, are addressed in a very limited number of national court cases. An analysis of case law and legislation reveals the problems that arise in the implementation of a contractual liability regime specifically addressed to contractual terms. Given the practical nature of the topic, a study is being carried out to examine contracts in practice between 2023 and 2024 in order to determine which standard representations and warranties prevail in business practice. |
