COVID-19 has substantially increased the legal and business risks involved in any sale taking place during the pandemic. Following on from the two new business purchase agreements added to the portfolio of templates last month, that consider and include relevant COVID wording, this month a set of COVID related warranties specifically drafted for a share sale have been added.
This template is based on the standard warranties found in any of the Share Sale and Purchase Agreements (SPAs) and includes additional warranties to cover the COVID-19 pandemic.
The extent to which a company being sold may be affected by the pandemic will vary from business to business, but most buyers will want increased warranty protection considering the important changes COVID-19 has introduced to employment law and health and safety regulation, as well as the potential impact on the company’s financing, customers and supply chain, legal and regulatory compliance and business continuity.
These warranties aim to complement the SPA offering and should be dropped into and replace the standard warranties in a SPA if COVID related warranties need to be included.
The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.