M&A Weekly Update — need for clarity when drafting conditions to completion; new regime for consumer credit authorisation; and more
British Overseas Nominees Ltd v Analytical Properties Ltd, a recent High Court case, is a useful reminder of the care that needs to be taken when drafting conditions to completion. In this case, in addition to a requirement that the landlord’s consent be obtained prior to completion, the seller was obliged to obtain certain certificates as ‘soon as practicable and in any event prior to the date of actual completion’. The seller successfully obtained the certificates in advance of completion. Following completion, the buyer sued the seller for breach of contract, claiming that the agreement had actually required the seller to complete before obtaining the certificates. The High Court agreed with the buyer and the seller was held liable for damages. Applying contractual principles of construction, it was held that the supply of the certificates was only a condition precedent to the buyer’s obligation to complete.
Impact – whenever there is a gap between exchange and completion, it is vital that the agreement clearly sets out the conditions to completion, who is entitled to waive them and the time period within which they must be met…
Click on the link below to read the rest of the Macfarlanes briefing.
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