What Does Legal Opinion Do

Also known as an “expert opinion”, a legal opinion is issued in the form of a letter from a law firm expressing legal conclusions and/or analyses of a particular transaction. The recipient of the notice then relies on its content as the basis for concluding the transaction. A fairly recent study by the ABA`s Business Law Section on private mergers and acquisitions in Canada shows a sharp decline in the number of legal opinions on such transactions. The study, which covered 64 transactions ranging from $5 million to $100 million from January 2010 to December 2011, showed that the percentage of transactions requiring legal advice from the target company`s lawyers increased from 72% in 2008 to 55% in 2011. The decline in the comparable study for U.S. transactions was even more pronounced, from 58% in 2009 to 27% in 2011. Whether an opinion should be required is sometimes controversial. Parties should always weigh the costs and benefits of an expert opinion when making this decision. For the recipient of the opinion, it is better to get an opinion than not to get an opinion, because of the added certainty, but opinions are often laborious and expensive. Since these costs are usually borne by the borrower, this threshold decision is often the result of discussion and negotiation. Transactions involving large amounts, unusual collateral, or borrowers with complicated organizational structures are the best candidates for required legal advice. In some transactions, such as syndicated loan transactions, opinions are always expected in accordance with market practice. In the United Kingdom and other common law countries, a legal opinion also refers to written legal advice on a point of law issued either by a lawyer or solicitor (often referred to as a “lawyer`s opinion”) or, occasionally, by a senior judicial officer, such as an Attorney General.

If the opinion is given by a foreign lawyer or law firm, it is generally referred to as “foreign legal advice”. While forms vary widely, most legal opinions include the following: Late appraisal requests, which require the borrower`s lawyer to do additional work, are often problematic due to time constraints. In addition, due diligence can sometimes uncover issues related to corporate or loan documents that need to be resolved before the notice can be issued and the transaction can be completed. For these reasons, it is preferable to agree on the scope of an opinion and complete the diligence of the opinion as early as possible in the transaction process. Another cost to the company is the time spent – not only in terms of lawyers` hourly rates, but also the fact that preparation, diligence and (in some cases) negotiations related to legal advice contribute to the process of closing the deal. This can be a challenge for companies that need to close a deal on a very tight schedule. All opinions relating to securities are subject to extensive restrictions, including the following: Common qualifications for a Notice of Appeal in the United States Commercial loan transactions Gail Merel (journalist), A. Mark Adcock, Robert W. Barron, Willis R. Buck, Jr., Jerome A.

Grossman, Louis G. Hering, Timothy G. Hoxie, Andrew M. Kaufman, Reade H. Ryan, Jr., Philip B. Schwartz and Stephen C. Tarry; 70(1): 121-160 (Winter 2014-2015) As a condition of entering into many types of business transactions, one or more parties may be required to provide written comments in favour of other parties to the transaction. These opinions are often referred to as “third-party opinions” because the opinion provider conveys them to one or more parties other than the influencer`s own client.

These opinions may cover a range of matters, including, but not limited to, the status and authority of the Company, the proper authorization, execution and delivery of transaction documents by the Opinionor`s own client, and the enforceability of such documents against the Opinionor`s own client in the transaction. Discussions about the scope of these opinions and the extent to which they are qualified are often time-consuming, and the resulting costs borne by the client whose lawyer is called upon to provide the expertise increase considerably during negotiations. This article focuses on third-party opinions related to the United States. Commercial loans take into account a number of qualifications that, for various reasons, depending on the authors` experience, usually include opinion leaders and generally accept opinion beneficiaries and their lawyers. The authors believe that identifying qualifications commonly used and accepted in the U.S. commercial lending market can help streamline the opinion process on many transactions. In commercial transactions, particularly in the context of financing, the lender requires expert advice on the viability of the borrower and the enforceability of the transaction documents that the borrower must conclude. This type of assessment is generally provided by the borrower`s lawyer or the lender`s advisor, according to the ethical rule that applies to the delivery of these expertises applicable to the jurisdiction. If the company in question is from a foreign country, the opinion is often referred to as a foreign legal opinion. A legal opinion is a mandatory closing delivery for many financing transactions, but the nature and purpose of the legal advice is often misunderstood by non-lawyers involved in the transaction. Typically, lawyers representing the parties work directly with each other on the notice.

Clients are usually involved early in the process when asked if an opinion should be required, or late in the process when problems arise. This article discusses the purpose and elements of legal advice, the types of problems that typically arise, and considerations about when legal advice should be required. We can give you our legal advice or we can help you get legal advice from a lawyer. We believe that our opinions are practical and allow you to make good decisions and follow the right course of action. An expert opinion is not the same as a legal opinion. This is the process of obtaining legal advice: many areas of business practice require formal legal advice from lawyers. The legal aid scheme in the United Kingdom requires legal advice demonstrating a reasonable chance of success before the Legal Aid Board funds an application. Professional negligence insurance policies often require the advice of legal counsel before the insurer is required to pay for an alleged claim (sometimes called a QC clause if it is to be the opinion of a senior lawyer).

Legal advice can be a valuable document for the protection of the addressee: (i) by informing the recipient of the legal effect of carrying out the proposed transaction; (ii) identification of legal risks; and (iii) confirmation that either party is capable of contracting and performing its obligations under the transaction documents. A legal opinion usually contains the following: invalid or objectionable? – Correcting Errors in Delaware Law Offerings v. Stephen Bigler and Seth Barrett Tillman, 63(4): 1109-1152 (August 2008) It is not uncommon for the stock records of a Delaware corporation to contain omissions or procedural irregularities that raise questions regarding the valid approval of some of the outstanding shares. Faced with such irregularities, most corporate lawyers would likely attempt to remedy the deficiency through ratification by the board of directors and, if necessary, ratification by shareholders. However, in a number of landmark cases, the Delaware Supreme Court has considered the legal formalities for the issuance of shares as substantive conditions for the validity of the shares issued, and the court has held that failure to comply with these formalities invalidates the actions in question, i.e.: Not curable by ratification. Unfortunately, Delaware court decisions have not provided the certainty necessary for practitioners to decide whether a particular error in inventory issuance is a material defect that invalidates inventory levels or a purely technical defect that makes inventory levels voidable. This article analyzes the cases that have led to this ambiguity and suggests that Delaware courts apply the policy underlying Section 8 of the Delaware Uniform Commercial Code to validate actions in the hands of innocent buyers to determine whether the actions are invalid or objectionable. Opinion on the role of normal practice in preparing and understanding third-party legal opinions 63(4): 1277#151;1280 (août 2008) Assurance négative dans les offres de titres (revised 2008) Rapport du Sous-comité des avis sur le droit des valeurs mobilières, Comité sur la réglementation fédérale des valeurs mobilières, Section ABA du droit des affaires, 64(2): 395-410 (février 2009) Special report on the preparation of substantive consolidation opinions The Structured Finance Committee and the Bankruptcy and Corporate Reorganization Committee of The Association of the Bar of the City of New York, 64(2): 411-432 (février 2009) The Role of Lead Counsel in Syndicated Lending Transactions Reade H.