Singapore: Disclosures In Corporate Transactions: A Comparison Of The UK/Singapore And US Approaches
Mondaq Business Briefing, March 2, 2017 Thursday
Introduction In negotiating the terms of a sale and purchase agreement, whether for a transfer of shares or business assets of a company, a purchaser will often have to rely on the results of its due diligence and the seller’s warranties. For a purchaser, the process of negotiating warranties serves to encourage the seller to disclose facts and events that may not otherwise be known in the course of its due diligence. Where such disclosures are not made, the purchaser may be able to claim damages as a result of the breach of the warranty. To balance the risks that come with the giving of warranties, the sale and purchase agreement is commonly accompanied by a seller’s disclosure letter. Disclosures are made by excluding, or carving out the incorrect facts or events otherwise covered under the warranty, to the extent that a disclosure could preclude a purchaser from claiming against a breach of the warranty.