Internationalisierung der Vertragskultur an Hand von Unternehmenskauf- und Finanzierungsverträgen
Authors: Hasenauer Clemens 
Published: April 2022

Abstract: The increasing internationalisation of business also affects the work carried out by the legal teams involved in commercial transactions. In many cases, English is chosen as the contract language for (crossborder) transactions because, apart from the customary nature of the language, it is usually also the "smallest common denominator" between the parties to the transaction. However, in most cases also the Anglo-American contract structure is adopted, with the consequence that the contracts are very much customised for the respective transaction. Further, such contracts show a level of detail which bears no comparison with continental European legal practices.

After a brief overview of the relevant statutory provisions of Austrian law on company purchase agreements, the article sets out the structure of share purchase agreements and international financing agreements and gives examples of standard clauses found in such agreements on the basis of the Anglo-American model.

Although it would be sufficient under Austrian law to stipulate the basic terms of the agreement (essentialia negotii) such as the object of purchase and the purchase price, in practice also Austrian transaction agreements tend to provide their own system of legal consequences, as the provisions of Austrian law are often not a perfect match for company purchase agreements (share deals and asset deals). For instance, the warranty provisions in the existing Austrian Civil Code, which is 200 years old, were not drawn up with company purchase agreements in mind. In this regard, the answer to the legal question "which are the customary characteristics of a company" is highly disputed in Austria. If a contracting party wishes to avoid (subsequent) disputes as much as possible, the object of purchase and its characteristics should be described in detail in the purchase agreement. Furthermore, share purchase agreements often contain an extensive list of representations and warranties. On the one hand, these relate to the object of purchase - for instance, the unencumbered ownership of the shares to which the agreement relates (Ownership of the Shares). On the other hand, they relate to the target company itself - for instance, the correctness and lawfulness of the target company's balance sheet (Accounts, Accounting Records and Statutory Books - Compliance with GAAP and Laws, True and Fair View).

In addition to extensive clauses on the liability of the seller, which is often restricted by means of Caps, Floors or statutes of limitations, such agreements also usually contain indemnifications and/or the obligation to hold the buyer harmless against certain risks (indemnities), such as environmental liability.

Anglo-American standards have also gained extensive acceptance in financing agreements. For example, an Events of Default clause makes it possible for the lender to terminate a loan agreement with immediate effect if the borrower is in breach of contractual provisions (primarily, the breach of interest or repayment obligations or non-compliance with financial covenants). Also the transfer of costs to the borrower, which are incurred as a result of a change of law or more stringent requirements with respect to regulatory capital, has meanwhile become the market standard (Increased Costs clause).