In the event of an overlap with the information provided by the seller, the seller has given assurances and assurance that the expected disclosure is complete and that certain conditions set out in the sales contract apply (or continue to apply) at the time of the conclusion. These insurances and guarantees will also serve as the basis for any right of compensation that one party may have against the other (as explained below). It is normal and appropriate for the seller to attempt to limit in several respects the scope of the information and presentations that the seller makes to the buyer. The main areas of negotiation are: (i) acting on behalf of the seller and the company, (ii) the period covered by the representations (i.e. when the seller`s representations to the buyer are made, if this is the case), and (iii) the seller`s representations that can be qualified by the use of “materiality” and “knowledge terminology”. For example, in a transaction involving more than one seller, buyers may first attempt to require all sellers to intervene on behalf of their own business and business, but it is customary to limit these individuals to management and control owners. Most sellers are willing to negotiate these points, but often the basic representations (often referred to as “fundamental representatives”) deny that they are subject to these changes. Basic representatives generally include those related to the existence and reputation of the company, the power of the company or seller to carry out the transaction, the ownership of assets, the taxes paid, if there are brokers involved in the transaction and compliance with health laws and regulations. The sales contract meets the requirements that the seller must disclose certain information relating to the transaction. These include a list of assets, commitments, ongoing litigation, personnel, licenses and equipment contracts. The information is provided on the calendars which are then attached to the sales contract. The seller is responsible for the process of creating schedules (which is just a little less laborious than the due diligence process) based on the requirements of the sales contract. If the essential information is not technically included in the information provided by the seller, it is not considered disclosed to the buyer.
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