Einde inhoudsopgave
Corporate Social Responsibility (IVOR nr. 77) 2010/7.3.2.3
7.3.2.3 Private transactions - legal reasons and scope
Mr. T.E. Lambooy, datum 17-11-2010
- Datum
17-11-2010
- Auteur
Mr. T.E. Lambooy
- JCDI
JCDI:ADS363407:1
- Vakgebied(en)
Ondernemingsrecht (V)
Voetnoten
Voetnoten
Article 6:248 DCC re pre-contractual good faith. See further: B. Wessels, Precontractuele aspecten van een bedrijfsovername [Pre-contractual aspects of a business acquisition], in Bedrijfsovername [Acquisition of a business], 2nd ed. (Kluwer: Deventer, 2005), pp. 3-9.
Offringa/Vinck & Van Rosberg, DSC 10 April 1998 (NJ1998/666) regarding a seller which had to inform the buyer of any construction faults in the building before the actual transaction; L.E. Beheer/Stijnman, DSC 16 June 2000 (NJ2001/559) concerning the situation in which the buyer had not conducted a due diligence investigation; even so, the seller should have informed the buyer about hidden liabilities related to the company.
VDL Shipyards, DSC 21 February 2003 (JOL 2003/111; LJN AF1891) concerning the size of a fuel tank of a new ship and the intention to use the ship as a seagoing vessel; the buyer should have indicated clearly which expectations he had concerning the new ship and the size of the fuel tank.
According to VBI/Interchem, DSC 10 October 2003 (LJN AI0306), it can be expected from professional parties that they perform an adequate due diligence investigation and demand sufficient guarantees when buying a business. If the buyer does not do so, he cannot demand a rescission of the contract.
See for scholarly analyses: H. Kersten, Het due diligence onderzoek' [the due diligence investigation], Dossier Ondernemingszaken [journal on corporate law subjects], 2001-47, pp. 28-33; M.M. Van Rossem, Garanties in de praktijk [representations and warranties in practice] (Kluwer: Deventer 2002), p. 210; H.J. de Kluiver, Overnamecontracten, letters of intent en guaranties' [acquisition agreements, letters of intent and representations and warranties], Dossier Ondernemingszaken [journal on corporate law subjects], 2001-47, pp. 34-43. W. de Nijs Bik, Mededelings- en onderzoeksplichten bij (bedrijfs)overname' [disclosure and enquiry duties in relation to a business acquisition], in Ondernemingsrecht, 16, 2003, pp. 627-631; W. de Nijs Bik, 'Het due diligence-onderzoek' [the due diligence investigation], in Bedrijfsovername [acquisition of a business], 2nd ed. (Kluwer: Deventer 2005), pp. 51-73. For an analysis of European tort law and the duty of care, see: C. Van Dam, European Tort Law (Oxford: Oxford University Press, 2006). He states that the tort of negligence in both common law and civil law jurisdictions generally 'consists of three elements: a duty of care, a breach of that duty and consequential damage' (p. 502).
Articles 6:228 DCC re dwaling [mistake] and 6:265re rescission. See e.g.: ABP/Hoog Catherijne, DSC 22 December 1995 (NJ1996/300) concerning damages under a representations and warranties claim that were not awarded because the buyer could have performed a more adequate due diligence investigation; VBl/lnterchem (supra note 22).
Mol/Meyer (Provamo), DSC 4 February 2000 (NJ2000/562) concerning sellers which had not informed the buyer of a potato processing factory about the illegal ways in which the factory obtained water and discharged its polluted water, hence the discovery of the hidden liabilities (tax claims) led to the rescission of the purchase agreement.
Under Dutch law as well as in other jurisdictions, buyers and sellers owe each other a certain degree of respect. By entering into negotiations they create a new ambiance - a pre-contractual stage - that requires care towards each other.1 Part of this doctrine prescribes that a party should provide the other party with correct and complete information as to the object of the transaction. This applies to the prospective seller and buyer in different ways. For example, under Dutch law: the seller must disclose the positive but also the negative features ('mededelingsplicht' [disclosure duty]);2 however, the buyer must clearly communicate which facets are important for him, so that the seller understands which information he needs to provide the buyer with.3 Moreover, on the buyer rests a duty to enquire and investigate whether the target-object or business fulfils his expectations ('onderzoeksplicht' [investigation duty]).4 An exchange of information by the parties as part of the preparation for the transaction, and to discharge their duty of care, is usually called a ' due diligence' investigation.5 If a party has not adequately performed such due diligence, this may have repercussions for its rights after concluding the transaction. If the buyer has not performed a sufficient due diligence investigation, it will be more difficult for him to rescind the transaction, or claim damages, in the event that some factual matters appear not to be to his liking. He could have found that out before, and is expected to have done so.6 On the other hand, if a seller remains silent about some crucial fact, e.g. an invisible construction fault in a building, or a liability that is not revealed by the annual accounts, he will be considered to have violated his duty to inform the buyer. As a consequence, the buyer is entitled to rescind the agreement or claim compensation.7
The scope of a commercial due diligence process is not prescribed. The parties to the transaction can agree on any type of information that will be exchanged between them. Sometimes, a buyer of a company is only interested in learning about really material issues. Since these mostly come up with regard to pensions, environmental or tax matters, parties can decide to limit the due diligence to these subject matters. Only specialists in these areas will then be hired to perform the investigation. In other situations, a buyer is mainly interested in acquiring a company because of the human capital. In that case, he will primarily focus on the employment agreements to ascertain that the key-employees will stay on after the take-over. Parties also need to agree on the scope of the investigation: will the buyer be given access to information concerning all companies in a corporate pyramid or just one or more of the top-holding companies?