The Offer to Purchase should contain a ‘subject to diligence’ clause written to the benefit to the buyer, and a ‘subject to diligence’ clause written to the benefit to the seller, whereby both parties will be granted full access to books, records, materials, contacts and/or other information that will satisfy the parties that they are indeed in possession of the relevant facts on which the Offer to Purchase has been made and accepted. If either shall find otherwise, the buyer must be able to withdraw the offer, and/or seller to withdraw acceptance of the offer, without penalty.

Prior to the offer, the buyer will not have had access all company books and records, but will have relied on, and will have made the Offer to Purchase relying on the representations of the Confidential Business Profiles and on what will have been learned through contact with the seller and/or seller’s broker or other representative (if any).  Similarly, acceptance will have relied on the representations of the buyer.

But now, it is time to prove those representations by opening up the books and records and other points of relative information. Thus, it will be highly important that the pre-diligence work conducted during in preparation of the valuation and business profile be thorough and factual.