8 NEWSLETTER 2021 Conclusion As explained above, for the accurate and efficient drafting of the representations and warranties, in the first step, careful structuring of the purchase transaction and identification and calculation of the risks via the due diligence process is crucial. Moreover, whether or not the share purchase results in a change of control is an aspect that directly affects the legal nature of the representations and warranties. In that sense, for transactions in which the activities of the company and the economic whole to be acquired together with the rights associated with the shares that are subject to transfer, a “Transaction” definition should be made and it should be stated that the qualification commitments and guarantees are not only provided for the shares, but provided for the whole transaction to prevent the discussions around the legal nature in the share purchase agreement. Moreover, being aware of whether or not the drafted provision is a qualification commitment or a guarantee while drafting representations and warranties is of crucial importance for the legal consequences of the provision. It should be emphasized that representations and warranties should be drafted in such a way that they correspond to the risks that are determined during due diligence. Demanding representations and warranties that do not pose any risk at all and including these in the agreement is not an achievement, rather, it is an element that negatively affects the quality and duration of the agreement and negotiations. Representations and warranties that are drafted in line with the risks that are spotted and calculated as the outcome of an accurate and effective due diligence process facilitates delivery of the economic benefits that are expected from the transaction in a rapid and efficient way.
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