After a term sheet in an asset or share purchase deal is signed, the parties will usually commence “due diligence”.
This article posted on our partner site Mondaq.com explains what is anticipated to occur during the due diligence process. It describes the issues that might arise for the purchase and issuer of shares, should there be inaccuracies in the disclosure that are not discovered during “due diligence” either through failure by the acquirer to ask, or failure by the issuer to provide such details.
Furthermore, it discusses the use of a “satisfaction of the purchaser of due diligence clause” by an issue that can be used to mitigate potential liability.