5 COMMERCIAL LAW er with the transfer of shares, in practice, agreements with a lengthy list of detailed representations and warranties are executed. The most common representations and warranties are created on the following subjects: corporate information, existence of the company, existence and validity of the shares, non-incumbent status of shares, administrative permissions, environmental law, material agreements, financial agreements and other financial documents, corporate books and records, financial records, balance sheet and profit loss calculations, information on properties (movable, immovable, intellectual property rights etc.), relations with clients and competitors/competition law, information on insurance, labor law and social security law, and disputes (cases, proceedings, administrative investigations and inspections, pretensions, notices, etc.). The provisions that are used under the representations and warranties title in practice are separately held by the scholars as “qualification commitments” and “guarantees”. Qualification commitments are employed to represent and warrant that the company whose shares are to be transferred carries certain qualifications and/or does not carry certain negative qualifications at the time the purchase agreement is concluded, i.e. when the promissory transaction is executed. In addition, these representations and warranties are reiterated with the act of disposal, when the endorsement and transfer of shares are completed.5 Moreover, guarantee declarations are employed to represent and warrant that certain positive events will occur or certain negative events will not occur.6 The difference between qualification commitments and guarantees is crucial. In the absence of special covenants in the agreement, qualification commitments are subject to liability arising from defects, whereas guarantees form a separate obligation. Therefore, in case of breach of guarantee commitments, general provisions regarding breach of contract will apply instead of liability arising from defects.7 5 Buz, Vedat: “Ortaklık Paylarının Devrinde Ayıba Karşı Tekeffül Hükümlerinin Uygulanabilirliği Sorunu”, Banka ve Ticaret Hukuku Dergisi, Vol. 35 N. 3, 2019, p. 71-72. 6 Buz, p. 72. 7 Buz, p. 72.
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