Representations and Warranties in M&A Transactions Under Bosnian Law: How Do We Tackle Unknown Territory?
摘要
The landscape of M&A transactions, particularly regarding representations and warranties, remains underexplored in Bosnian legal scholarship and case law. Nonetheless, the current legal framework in Bosnia and Herzegovina, which draws from the Swiss Law on Obligations, provides the tools necessary for buyers to mitigate unexpected financial risks. These risks could otherwise undermine the value of the shares being acquired. This chapter examines whether Bosnian law accommodates standard buyer protection mechanisms via contractual representations and warranties. The principle of freedom of contract grants parties significant flexibility in protecting buyers from the negative impacts of undisclosed obligations and other adverse conditions of the target company. Parties can negotiate a comprehensive range of representations and warranties tailored to their specific transaction, following the model established for standard purchase agreements. Case law supports the dispositive nature of the warranties within the context of standard purchase agreements. Leveraging this fundamental aspect of purchase agreements under Bosnian law, representations, and warranties are clearly available to the parties involved. Therefore, Bosnian law is compatible with typical M&A transaction tools.