In this thesis, I address contractual mechanisms that parties have at their disposal to manage risks related to the sale of business. I critically assess the relevant law (its limits and pitfalls) with special attention devoted to parties' autonomy and possibilities of contractual risk allocation. Three key aspects are addressed in detail: Efficient sale process management, information exchange and contractual risk allocation mechanisms. By analysing and critically evaluating current solutions, the aim of the thesis is to offer the reader practical advice on when and how a particular issue (or risk) can be optimally addressed.
The structure of the thesis is as follows: It begins with a comparative presentation of the two models of business sale (share and asset deals) and continues to briefly sketch the process of sale. Next, it investigates information exchange, focusing on confidentiality agreement. Letter of intent and due diligence are also briefly described. The main part of the thesis is devoted to contractual risk allocating techniques that parties have at their disposal within selected categories of provisions of a typical purchase and sale agreement (representations, covenants and conditions in connection to termination and indemnity provisions); most notably, the interplay between these categories is thoroughly investigated.
Legal relationship of the parties involved in sale of business forms a complex and interconnected system, which demands an understanding and anticipation of a broad spectrum of possible outcomes as well as their timely consideration. Certainly, the main part of the final result always depends on actual circumstances, but the findings of this thesis bridge the gap between theory and practice, and provide both poles with an insight to the other's reasoning. Applying a »practical approach« towards finding new solutions, taking into consideration both of them, presents the main value of this thesis, since it provides practitioners as well as scholars a useful tool for assessing legal implications of individual business arrangements and offers possibilities for improvements.