432 13 Due Diligence and Disclosures
seeks to treat as generally disclosed in relation to all warranties/representations the contents
of the documents contained in the data room (if there is one); buyers will usually resist
wholesale disclosure of a data room.
US convention has been for the buyer to allow specific disclosures only in respect of
each warranty and representation against which disclosure is being made. General disclo-
sures are not common, and a buyer under a US agreement will commonly seek to provide
in the agreement that specific disclosures are not treated as effective disclosures in relation
to any warranty unless specifically cross-references.”
Legal requirements and legal constraints. The legal requirements and legal con-
straints tend to be complicated. There are different legal requirements and different
legal constraints for different parties and depending on the context. It can therefore
be difficult to identify all legal requirements and legal constraints. It can also be dif-
ficult to interpret the legal rules identified and apply them in a concete situation.
Some legal requirements and legal constraints will be discussed in the following.
13.3 Legal Requirements and Legal Constraints
13.3.1 General Remarks
Basically, the legal requirements and legal constraints always depend on the iden-
tity of the person by whom disclosure is to be made and the identity of the person
to whom disclosure is to be made (Volume I). It is also necessary to distinguish
between different kinds of norms: (a) a right to disclose information; a duty to dis-
close information; a duty not to disclose information; as well as (b) a right to ask
for information; a right to receive information; a duty to ask for information; a
duty not to ask for information; and a duty not to use information received.
Such rights and obligations are typically based on different legal sources de-
pending on the identity of the parties and the circumstances (see below).
It is also worth noting that the actions of a party are constrained not only by le-
gal rules that apply to that party but also by the personal duties of its own repre-
sentatives who are expected to comply with their own personal obligations (for
compliance, see Volume I).
Information rights and duties. Information rights and obligations are typically
based on different legal sources depending on the identity of both parties and the
circumstances. In the context of business acquisitions, the core parties are the ac-
quirer, the vendor, the target, as well as members of the corporate organs of each
party. Five situations will be briefly studied in the following:
- vendor due diligence from the perspective of the vendor;
- buyer due diligence from the perspective of the vendor;
- buyer due diligence from the perspective of the target’s board;
- buyer due diligence from the perspective of the buyer; and
- buyer due diligence from the perspective of the buyer’s board.