Legal opinion is a detailed written legal advice on a specific issue or aspect of the client’s business. It is prepared not only upon assignment, but solely in the interests of the client and cannot simultaneously guarantee interests of third parties (for example, both parties of a deal). High-quality legal opinion allows to determine legal compliance of a deal (project, real estate), as well as viability of legally binding actions planned by the client.
Legal opinions are used in various situations. Legal opinions on cross-border deals may be used to determine whether submitted documents are legally binding, valid and efficient, and whether they comply with legislation under the jurisdiction of our interest.
Legal opinions on financial deals may be used to determine whether a proposed draft contract contains all legal provisions required for obtaining a desirable result, and whether additional legally binding actions will be required for legal effect of crediting in the deal under consideration to meet expectations.
Legal opinions on the prospects of emission of securities may be used upon securities offering to confirm that it complies with all legal requirements and other legislation.
Legal opinions on real estate allow determining risks of acquisition or holding of this real estate.
A client ordering Legal Opinion expects legal clarity and precise legal analysis of legal risks of a deal or a project in the document.
Foreign practice knows cases of filing a lawsuit against legal companies that issued inaccurate Legal Opinion.
Responsibility of the executing party will depend on the language of Legal Opinion. Therefore, clients ordering Legal Opinion should pay attention to overuse of reservations and assumptions, ambiguity of Legal Opinion that may later allow lawyers to avoid responsibility for misinterpretation of Legal Opinion.
High-quality Legal Opinion is characterised by precise language, transparency of original circumstances, validity (reference to legislation) and clear conclusions.
It should be mentioned, that Legal Opinion should not be deemed as a substitute for legal support, counterparties should not expect that Legal Opinion will give them strategy and skills to implement their project or make a deal on their own.
This section of Legal Opinion usually contains background information on the data of deals and documents submitted by the client. This section also contains information on applicable law depending on the jurisdiction under which legal relations of interest to the client arise.
This section reflects process and results of review of the submitted documents, process and results of additional collection of information required for the preparation of Legal Opinion. As a rule, these are transaction documents, incorporation documents, minutes of meetings of the company’s management. When describing documents one should state whether their originals, drafts or copies have been reviewed. When describing enquiries for additional information, one should include information on enquiries to state registration, tax, patent or other administrative authorities and the respective results, including absence of results. If preparation takes time, one should not forget about an option of a repeated enquiry in order to include potential changes from the date of previous enquiries.
Assumptions, i.e. conclusions stated in the Legal Opinion inevitably depend on assumptions of its author. Reference points for assumptions specified by the author of the Legal Opinion may give a chance to control the level of depth and validity of the performed analysis. This section contains basic assumptions, as well as the ones determined by particular circumstances.
Special assumptions are essential circumstances peculiar for a certain deal, project, real estate, which are legally binding for parties and accepted by the author of the Legal Opinion as a reference point.
This section contains answers to questions posed by the client ordering the Legal Opinion. This section should contain legal conclusion and/or legal analysis of a deal. However, the rigidity level of an expressed opinion depends on the number of reservations to it.
Reservations depend on the type of deal. For example, one may come across a reservation on the need to apply foreign legislation if an obligation shall be performed beyond jurisdiction specified in the Background, all the way to the information that performance of such an obligation cannot be enforced under the local jurisdiction or is not even subject to judicial protection.
The majority of questions asked by the clients are related not only to the quality of the Legal Opinion, but to the terms of preparation. Terms of the Legal Opinion preparation depend on the level of adjustment for work on the Legal Opinion. This is particularly important for cases with issues of several jurisdictions where the engagement of relevant specialists or foreign partners is required. Well-developed in-house procedure on making Legal Opinions is a significant factor of efficiency of a legal company. Another factor is readiness of a legal company to bear responsibilities for adverse consequences in case of an inaccurate Legal Opinion.
Even the approval date of Legal Opinion stated by a legal company is a significant factor. Experienced specialists update the Legal Opinion as of the date of deal making. This action is performed so that the client may be certain that this Legal Opinion reflects legislation and legal precedents as of the date of the deal.