Question

Name two key sections in a merger agreement that aim to protect the benefit of the bargain from either the buyer’s or the seller’s perspective and describe how each of them protects the benefit of the bargain?

Answer 1

Answer:-

Thw two key sections in a merger agreement that aim to protect the benefit of the bargain may be stated as under:-

A merger is an agreement that unites two existing companies into one new company. There are several types of mergers and also several reasons why companies complete mergers. Mergers and acquisitions are commonly done to expand a company's reach, expand into new segments, or gain market share.

Manner of transferring or converting shares - It is critical to a merger or acquisition for the terms of converting shares to be clearly articulated. This is because many of these transactions are based on the benefits that shareholders will enjoy. It protects the benefit of bargain by making sure that the parties involved in the merger agreement could not make undue advantage of each other' businesses as they decide the manner of cinverting shares beforehand.

Representations of parent and company - Both companies (the acquiring company and the company to be acquired) must make truthful representations about what their assets and liabilities going into the transaction. These may include statements of what intellectual property each company owns, any pending lawsuits or judgments that affect each company as well as any records or reports that must be kept. It will protect the benefit of bargain by not giving any opportunity to either the parent and the company to overrule each other in any way out and be in neutral positions after the aggrement has been entered into.