Balance Sheet Guarantee in a Share Purchase Agreement and Its Impact on the Calculation of a Purchase Price Reduction
2017
Abstract
The Article deals with the notion, types and legal significance of the so called balance sheet guarantee. The seller of a share in a company by it declares that the balance sheet delivers a true and fair view of the situation of the company.
Upon the background of the recent outcomes of the German and Austrian legal science and judicial decisions, the authors analyse, what impacts such guarantee produces on the scope of the seller's liability for defects of the share, which relate to the state of the company's enterprise, and how these defects reflect in calculating the purchase price reduction.