Balance of rights and obligations of parties of company sales and company lease contracts

Balance between counterparties‘ rights and obligations in business transfer deals is analysed in this Master‘s work. Although business transfer is quite frequent occurrence in practice, it is barely investigated in scientific literature. Particularity of company sales, lease and reorganization as methods of business transfer, obligations of due diligence, disclosure and confidentiality, the institute of contractual guarantees are researched in this work as well as purchaser‘s possibilities to protect his rights in cases of a breach and occasions when vendor‘s responsibility is being limited. During the investigation, it was established that a purchaser is not allowed to protect his interests relying on the deficiency of the company if the obligation of due diligence was not performed, even though it is still discussed if this obligation is mandatory. Because of complexity to foresee all the possible risks of a business transfer deal, a purchaser is given the right to require a vendor to issue guarantees about the facts defining the condition of a company in order to transfer the responsibility for deficiencies to a vendor. A purchaser is able to protect his rights by requiring a vendor to eliminate company‘s deficiencies, diminish the price of a contract, compensate the damage (penalties, if agreed) and, in exeptional circumstances, terminate a contract. Meanwhile, a vendor is given the right to oppose to purchaser‘s requirements if it is admitted that a purchaser knew or had to know about the deficiencies of a company but did not notice them because of neglection. Vendor‘s responsibility can also be limited by counterparties‘ agreement, although that kind of practice is being criticized and frequently disowned in courts‘ decisions. The main problem emerges while attempting to determine the margins between purchaser‘s obligation of due diligence and vendor‘s obligation of disclosure. Therefore, an estimation of mentioned obligations for performing a contract is presented in this Master‘s work as well as recommendations in which cases and to what extent each of these obligations should be applied