Blog Bite: What Are the Consequences of Purchasing Shares Without Due Diligence?

This article posted on our partner site Mondaq.com explores the Quebec case, Francoeur v. 4417186 Canada Inc., as a cautionary tale against entering into a share purchase agreement sans due diligence or full disclosure.

The purchasers were made to bear the risks of having entered into a contract explicitly forbidding due diligence. This case highlights the balancing act between the seller’s desire to closely guard their confidential information against the purchaser’s desire to avoid surprises in a share purchase or M&A transaction.


Written by Alina.