Contracts and due diligence
Each investment, in addition to technical and financial aspects, requires a careful analysis of the legal aspects. Contracts are often underestimated, as they are sometimes prepared in a hurry or without including important elements of protection and clarity in case of problems. A good contract is a document that protects against misunderstandings and clarifies the responsibilities between the parties even when these, due to unforeseeable events, are in total disagreement.
To minimize surprises, when a customer is close to negotiation, due diligence is a very useful tool, that is, the deepening of data and information relating to the object of the negotiation. This document is used to evaluate the convenience of a deal and to identify the risks and related problems, both to negotiate the terms and conditions of the contract and to prepare adequate instruments of guarantee, indemnity or compensation.
We specialize in creating and revising contracts for commercial negotiations. Our consultancy offers the help of expert lawyers in the sector and establishes a direct dialogue with local professionals, based on the country in which the legal competence is chosen.
Beyond the form imposed by the legislator of the specific country, it should be noted that in common law countries there is a tendency to draw up much more detailed contracts than in continental law countries. In the latter, there are no codes that can integrate their provisions so that the contract must be as complete and self-sufficient as possible.
We also take care of checking the exact coincidence of the concepts expressed with the actual will and purposes set by the parties, the conformity of the text in its entirety with the law, the clarity and uniqueness of the meaning of the sentences, the orderly and consequential display of the articles (each must exhaust a topic and then move on to the logically next one).
- Drafting of contracts
- Contract revision and translation
- Letters of Intent / Interest (LOI)
- Creation and/or revision of attachments
- Dialogue with local lawyers
- Analysis of contractual proposals
- Negotiations between the parties
- Contractual intermediation
The due diligence can be articulated in the course of different phases of the negotiation, being able to take place before, during or after the conclusion of the deal.
- The pre-contractual due diligence is focused on the salient details of the negotiation; it is usually undertaken by the potential buyer and is carried out jointly and with the collaboration of the seller. Its outcomes directly and significantly affect the choice to conclude the deal and its conditions (including warranty clauses);
- The post-stipulation and pre-closing due diligence are carried out when there is already a contractual obligation that binds the parties, even if not definitive; in this case, the investigation activity is aimed at verifying the acquired data and guiding subsequent negotiations;
- The post-closing due diligence, carried out after the conclusion of the contract, is aimed at allowing the buyer a more in-depth knowledge of the acquired asset and verifying the compliance of data or facts with what is guaranteed by the seller. Normally, the information and data that the prospective buyer asks the seller to consult are listed.
Due diligence may include activities of the following nature:
- legal: verification of documentation such as the deed of origin, cadastral surveys, examination of prejudicial transcripts such as voluntary and judicial mortgages, contracts (eg leases);
- technical: compliance of the state of affairs with the deposited plan (abuses, amnesties, amnesties), consistency of the quality and state of the building, evaluation of the costs and times necessary for the adaptation of the property (repairs, renovations, change of use or redevelopment). This analysis includes environmental aspects, plant engineering and the structure of the building;
- economic: evaluation of the property with regard to current and potential use, with respect to the area where it is located and the trend of the reference market (residential, office, commercial or industrial);
- financial: possibility of credit recovery in terms of time required to complete the procedure, quantity and costs to be anticipated.