{"id":44160,"date":"2017-08-01T10:21:03","date_gmt":"2017-08-01T08:21:03","guid":{"rendered":"https:\/\/newserver.fyb.de\/produkt\/warranty-indemnity-insurance-closing-a-gap\/"},"modified":"2017-08-01T10:21:03","modified_gmt":"2017-08-01T08:21:03","slug":"warranty-indemnity-insurance-closing-a-gap","status":"publish","type":"product","link":"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/","title":{"rendered":"Warranty & Indemnity Insurance \u2014 Closing a Gap"},"content":{"rendered":"

Florian T. Hirsch\u00admann<\/strong> \u2014 Lawyer and Part\u00adner DLA Piper UK LLP, Munich<\/p>\n

Silvio McMi\u00adken<\/strong> \u2014 Lawyer and Senior Asso\u00adciate DLA Piper UK LLP, Munich<\/p>\n","protected":false},"excerpt":{"rendered":"

In contracts on the purchase and trans\u00adfer of compa\u00adnies, the so-called Sale and Purchase Agree\u00adment (SPA), the list of seller warran\u00adties and the legal conse\u00adquen\u00adces of brea\u00adches of warranty by the seller alre\u00adady occu\u00adp\u00adies a domi\u00adnant posi\u00adtion due to the sheer volume and the usually central posi\u00adtion in the text of the contract, although from the perspec\u00adtive of legal coun\u00adsel other parts of the contract require at least the same if not even grea\u00adter atten\u00adtion. Howe\u00adver, this domi\u00adnant posi\u00adtion is not without reason for the guaran\u00adtees, as it reflects the great econo\u00admic importance of the seller guaran\u00adtees for the parties to the SPA and the parties\u2019 widely diver\u00adgent nego\u00adtia\u00adting positions.<\/strong><\/p>\n

Nego\u00adtia\u00adti\u00adons on warran\u00adties are often contro\u00adver\u00adsial, and not without reason, because it is precis\u00adely in this area that the seller faces high econo\u00admic risks that reduce the profit from the sale. As is alre\u00adady custo\u00admary in\u201csecon\u00adda\u00adries\u201d<\/em>, i.e. company acqui\u00adsi\u00adti\u00adons and sales between private equity compa\u00adnies, private equity funds as sellers of port\u00adfo\u00adlio compa\u00adnies are now also provi\u00adding less and less exten\u00adsive guaran\u00adtees to stra\u00adte\u00adgic buyers. The reason given for this is that the Fund cannot provide any further guaran\u00adtees for regu\u00adla\u00adtory reasons. Stra\u00adte\u00adgic buyers are thus faced with the ques\u00adtion of how to achieve the mini\u00admum level of protec\u00adtion through guaran\u00adtees, apart from the usual funda\u00admen\u00adtal hedges such as owner\u00adship of the shares (\u201ctitle\u201d<\/em>).<\/p>\n

Thus, the parties often enter nego\u00adtia\u00adti\u00adons with extreme posi\u00adti\u00adons in order to have as unrest\u00adric\u00adted a nego\u00adtia\u00adting posi\u00adtion as possi\u00adble; a balan\u00adced cata\u00adlog of guaran\u00adtees in the first draft of the purchase agree\u00adment rarely meets with the appr\u00adoval of the respec\u00adtive parties. The Seller shall make every effort to mini\u00admize the warran\u00adties to be given by it and to limit or exclude legal conse\u00adquen\u00adces as far as possi\u00adble. The buyer, on the other hand, will in turn demand disclo\u00adsure of all value-crea\u00adting circum\u00ads\u00adtances of the target company and, in the event that risks have not been disc\u00adlo\u00adsed, seek protec\u00adtion through exten\u00adsive seller guarantees.<\/p>\n","protected":false},"featured_media":18963,"comment_status":"open","ping_status":"closed","template":"","meta":{"wp_typography_post_enhancements_disabled":false},"product_brand":[],"product_cat":[2452,2477,2478,2552],"product_tag":[1890,1906,1914,1921,1966,1975,1979],"class_list":{"0":"post-44160","1":"product","2":"type-product","3":"status-publish","4":"has-post-thumbnail","6":"product_cat-ebook-en","7":"product_cat-florian-t-hirschmann-en","8":"product_cat-silvio-mcmiken-en","9":"product_cat-fyb-2016-en","10":"product_tag-hirschmann-en","11":"product_tag-florian-t-en","12":"product_tag-mcmiken-en","13":"product_tag-silvio-en","14":"product_tag-sale-and-purchase-agreement-en","15":"product_tag-company-acquisition-en","16":"product_tag-seller-warranties","17":"pa_sprache-english-3","18":"pa_sprache-german","20":"first","21":"outofstock","22":"taxable","23":"shipping-taxable","24":"purchasable","25":"product-type-variable"},"yoast_head":"\nWarranty & Indemnity Insurance - Closing a Gap - FYB Financial Yearbook<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Warranty & Indemnity Insurance - Closing a Gap - FYB Financial Yearbook\" \/>\n<meta property=\"og:description\" content=\"In contracts on the purchase and transfer of companies, the so-called Sale and Purchase Agreement (SPA), the list of seller warranties and the legal consequences of breaches of warranty by the seller already occupies a dominant position due to the sheer volume and the usually central position in the text of the contract, although from the perspective of legal counsel other parts of the contract require at least the same if not even greater attention. However, this dominant position is not without reason for the guarantees, as it reflects the great economic importance of the seller guarantees for the parties to the SPA and the parties' widely divergent negotiating positions. Negotiations on warranties are often controversial, and not without reason, because it is precisely in this area that the seller faces high economic risks that reduce the profit from the sale. As is already customary in"secondaries", i.e. company acquisitions and sales between private equity companies, private equity funds as sellers of portfolio companies are now also providing less and less extensive guarantees to strategic buyers. The reason given for this is that the Fund cannot provide any further guarantees for regulatory reasons. Strategic buyers are thus faced with the question of how to achieve the minimum level of protection through guarantees, apart from the usual fundamental hedges such as ownership of the shares ("title"). Thus, the parties often enter negotiations with extreme positions in order to have as unrestricted a negotiating position as possible; a balanced catalog of guarantees in the first draft of the purchase agreement rarely meets with the approval of the respective parties. The Seller shall make every effort to minimize the warranties to be given by it and to limit or exclude legal consequences as far as possible. The buyer, on the other hand, will in turn demand disclosure of all value-creating circumstances of the target company and, in the event that risks have not been disclosed, seek protection through extensive seller guarantees.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/\" \/>\n<meta property=\"og:site_name\" content=\"FYB Financial Yearbook\" \/>\n<meta property=\"og:image\" content=\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/07\/Hirschmann.png\" \/>\n\t<meta property=\"og:image:width\" content=\"334\" \/>\n\t<meta property=\"og:image:height\" content=\"298\" \/>\n\t<meta property=\"og:image:type\" content=\"image\/png\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/\",\"url\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/\",\"name\":\"Warranty & Indemnity Insurance - Closing a Gap - FYB Financial Yearbook\",\"isPartOf\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#website\"},\"primaryImageOfPage\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/#primaryimage\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/#primaryimage\"},\"thumbnailUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/07\/Hirschmann.png\",\"datePublished\":\"2017-08-01T08:21:03+00:00\",\"breadcrumb\":{\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/\"]}]},{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/#primaryimage\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/07\/Hirschmann.png\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2017\/07\/Hirschmann.png\",\"width\":334,\"height\":298},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/www.fyb.de\/en\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"FYB Shop\",\"item\":\"https:\/\/www.fyb.de\/en\/shop\/\"},{\"@type\":\"ListItem\",\"position\":3,\"name\":\"Warranty & Indemnity Insurance \u2014 Closing a Gap\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.fyb.de\/en\/#website\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"name\":\"FYB Financial Yearbook\",\"description\":\"For Your Business\",\"publisher\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.fyb.de\/en\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.fyb.de\/en\/#organization\",\"name\":\"FYB Financial Yearbook\",\"url\":\"https:\/\/www.fyb.de\/en\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"contentUrl\":\"https:\/\/www.fyb.de\/wp-content\/uploads\/2020\/06\/logo.svg\",\"caption\":\"FYB Financial Yearbook\"},\"image\":{\"@id\":\"https:\/\/www.fyb.de\/en\/#\/schema\/logo\/image\/\"}}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Warranty & Indemnity Insurance - Closing a Gap - FYB Financial Yearbook","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.fyb.de\/en\/produkt\/warranty-indemnity-insurance-closing-a-gap\/","og_locale":"en_US","og_type":"article","og_title":"Warranty & Indemnity Insurance - Closing a Gap - FYB Financial Yearbook","og_description":"In contracts on the purchase and transfer of companies, the so-called Sale and Purchase Agreement (SPA), the list of seller warranties and the legal consequences of breaches of warranty by the seller already occupies a dominant position due to the sheer volume and the usually central position in the text of the contract, although from the perspective of legal counsel other parts of the contract require at least the same if not even greater attention. 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Thus, the parties often enter negotiations with extreme positions in order to have as unrestricted a negotiating position as possible; a balanced catalog of guarantees in the first draft of the purchase agreement rarely meets with the approval of the respective parties. The Seller shall make every effort to minimize the warranties to be given by it and to limit or exclude legal consequences as far as possible. 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