Legal Due Diligence · glossary
Latin for “let the buyer beware”. A seller of shares in a private company generally has no duty to tell the buyer what is wrong with it. That is why the buyer investigates before signing and takes promises in the SPA. Chapter 1
Explained in Chapter 1, What Due Diligence Is For, of Legal Due Diligence.
The main page for this term is Caveat emptor, in Buying Commercial Property.
When you buy shares in a private company, the seller generally has no duty to tell you what is wrong with it, and keeping quiet is usually not treated as a false statement. The rule is called caveat emptor (“let the buyer beware”). So the buyer protects itself in two ways. It investigates before signing, and it takes promises in the contract, the share purchase agreement (SPA).Read Chapter 1, What Due Diligence Is For →
Chapter 1 and this glossary are open to everyone; the whole edition is free to read with a free account until 31 January, and it stays open to an account opened by then.Chapter 1 of Legal Due Diligence and this glossary are free to read; the rest of the edition is in the Library, at €12 a month or €79 for a Year Pass.
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