Share Purchase Contract: Due Diligence-Investigation In this article of the SPA, due diligence is paid by the buyer. And how the parties are doing (importance and consequences). Important and work for experienced transaction lawyers. As a general rule: 1. a No. 2. A Memorandum of Understanding (MOU). 3. a SD (due diligence – due diligence of the company to be acquired). In its letter of January 29, 2015, VRS justified the termination of the POA with immediate effect by stating that APP had breached its obligation to Chapter II, art. 1 POA, to effectively promote the sale of the products (VRS) mentioned in the POA. VRS declares “effective” as “effective” because the promotion of products leads to effective sales. VRS claims that this causes damage because it sells less (to APP) in the territory of the APP.
In this proceeding, the grounds for non-compliance with the two other obligations set out in Chapter II, Article 1 of the PoA, namely “protecting the interests of the supplier with the necessary diligence of a responsible businessman” and VRS` information on APP`s activities and market conditions were added. APP challenges VRS`s interpretation of these obligations and finds that it has not fulfilled its obligations. Even if this were the case, it does not justify the denunciation of the agreement, as the deficiency is not “fundamental”. This will only be possible if the commitment is at the heart of the agreement. According to App, the bottom line of the agreement was that Vialis/VRS withdrew from the Asia-Pacific market; APP has been granted the exclusive right to sell VRS products in this region and has been authorized to manufacture them itself. According to the APP, VRS could not, on the basis of the POA, have expectations for the possible turnover of VRS, which would (still) come from the Asia-Pacific region from APP`s operations. APP was not required to sell (exclusively) VRS products.