Introduction
Legal support for business transactions and contracts, before anything goes wrong. In the purchase or sale of a business, the setting up of a collaboration or the conclusion of a long-term contract, the relationships between the parties are set for years, and the quality of those arrangements only becomes apparent when things go against them. Prime Law combines transaction advice with litigation experience: every provision is tested against whether it holds up when things go wrong, what evidence is then needed and how the court will interpret it. That produces contracts that are not only legally sound but also litigation-proof, written with an eye to the dispute that will hopefully never come.
Share purchase agreement (SPA)
In the purchase or sale of a business, the share purchase agreement allocates risk between buyer and seller. It sets out the warranties on the state of the business, the indemnities for known risks and the price mechanism, from a fixed purchase price to an earn-out or a completion accounts arrangement. In a later dispute the question is whether a warranty was breached, whether a claim was made in time and correctly within the agreed periods, and how the loss is assessed. A sharp definition of what is warranted and what the buyer is deemed to have investigated determines who bears what comes to light after completion.
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Shareholders' agreement (SHA)
The shareholders' agreement sets out how shareholders cooperate and part ways, alongside and sometimes in departure from the articles of association. It governs decision-making, transfer restrictions such as lock-up, offer obligations and tag- and drag-along, and a deadlock mechanism should relations break down. In a conflict it is decisive whether an arrangement has effect under company law or only between the parties, and whether a breach can be enforced by a penalty or specific performance. Sound exit and dispute provisions prevent a deadlock from being resolvable only through inquiry proceedings or the statutory dispute scheme.
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Cooperation and joint venture agreement
The cooperation or joint venture agreement governs the joint undertaking: the contribution of capital, knowledge or resources, decision-making, profit sharing and the parting of ways. Crucial is the balance between control and risk, and what happens on default, deadlock or the departure of a party. The arrangements on termination and its consequences, such as a non-competition clause and the division of jointly built-up value, determine how smoothly the parties can separate later.
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Letter of intent (LOI)
The letter of intent precedes a transaction and records the main terms, exclusivity and confidentiality before negotiations begin. What matters in a dispute is which parts are intended to be binding and which are not: an unclear letter of intent can unintentionally lead to being bound or to liability for broken-off negotiations. Clear wording on the status, the reservations and the consequences of the deal falling through keeps the parties in control.
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Distribution and agency agreement
The distribution or agency agreement governs sales through an intermediary, with exclusivity, targets and the conditions for termination. In agency the law protects the commercial agent, including a notice period and a goodwill payment on termination (Section 7:442 DCC); in distribution no such regime applies and the standard for terminating continuing contracts governs. Whether a relationship qualifies as agency or distribution, and which notice period and payment go with it, is what is most often litigated later.
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Franchise agreement
The franchise agreement governs operating under a formula, for a fee and within the franchisor's requirements. Since the Franchise Act (Section 7:911 et seq. DCC) mandatory rules apply on pre-contractual information, consent to material changes to the formula and a reasonable goodwill payment and non-competition clause on termination. Compliance with that duty of information and the scope of the non-competition clause determine the relationship between franchisor and franchisee.
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Licence agreement
The licence agreement governs the use of an intellectual property right: the scope of the licence, whether it is exclusive, the territory, the fee and the term. In a dispute the question is whether a particular use still falls within the licence or already constitutes infringement, and what happens to the right and to running sub-licences on termination. A sharp definition of the permitted use prevents both infringement and breach discussions.
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Contract for services
The contract for services governs the provision of services that do not result in a work of a material nature (Section 7:400 DCC): the assignment, the fee, the service provider's duty of care and termination. The client may in principle terminate at any time, while the service provider is bound by stricter requirements. The definition of the assignment and of liability for a shortcoming determines what the service provider must deliver and what it stands in for.
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Non-disclosure agreement (NDA)
The non-disclosure agreement governs the sharing of confidential information, for instance during a due diligence or a collaboration. Decisive for enforceability are the definition of what is confidential, the duration of the obligation and the sanction for breach, usually a penalty clause because the loss is hard to prove. An overly broad or vague confidentiality obligation is difficult to enforce in practice.
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Loan agreement
The loan agreement governs the principal, the interest, the repayment schedule and the acceleration. The key provisions are the grounds on which the loan becomes immediately due and the onset of default, possibly reinforced with security and with arrangements on subordination or ranking. Clear arrangements on acceleration and default prevent a loan from turning into a protracted dispute when things go wrong.
Deed of pledge
The deed of pledge creates security by a silent or disclosed right of pledge over, for instance, stock, receivables or shares. It governs the scope of the pledge, notice to debtors and the manner of realisation, and the ranking relative to other secured creditors. On bankruptcy or concurrence, the validity of the creation and the ranking determine whether the pledgee actually has priority.
Escrow agreement
The escrow agreement holds a payment or a document in safekeeping with an independent third party until the release conditions are met, for instance part of the purchase price for possible warranty claims after an acquisition. The precise release conditions and the role of the escrow agent in a dispute determine who receives the payment if the parties disagree. Unclear conditions shift the dispute from the purchase price to the escrow itself.
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Contract for work
The contract for work sets out the work, the contract price and the handling of changes, and governs delivery and liability afterwards (Section 7:750 et seq. DCC). Additional work, the contractor's duty to warn, delivery and liability for defects are the matters over which most construction disputes arise. Clear arrangements on pricing, additional work and delivery, also in the light of the Building Quality Assurance Act, limit those disputes.
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Settlement agreement
Where a dispute or uncertainty is brought to an end, this is done by a settlement agreement: a determination to prevent or end uncertainty, usually with final discharge (Section 7:900 DCC). Decisive are the scope of that discharge and which reservations were made, for on this stands or falls whether a matter is truly resolved. An overly broad or overly narrow definition itself gives rise to a fresh dispute over what the parties actually agreed.