Guarantees in stock or asset purchase contracts are generally broad. They make a series of assertions about property status, labour and labour law, processes, asset status, accounting and operating systems. If the transaction is a share deal, there will also be assurances and guarantees regarding the equity of the objective. While the buyer may have performed his own due diligence, he will generally always expect the seller to confirm several facts in this section. They will also have to be at the origin of these facts throughout the sale process. As a result, the responsibility for guaranteeing sales contracts appears legally or contractually. The legal guarantee is the liability arising from the absence of the expected qualifications in the product, which are subject to the sales contract, and defects that reduce its value2. 4 To consider that such representations do not fall within the scope of Article 219 TCO, see. Ayo-lu, 257. You will find another view under Esin, Smail G.; Lokmanhekim, S. Tuna.
“M-A Transactions Under Turkish Law,” 39-40 (in Ayo-lu, p. 257). When the buyer issues equity securities to the seller, another guarantee is given. In the event that the insurance and guarantees provided in the agreement relate to the qualifications of the companies concerned, not to the shares (due to the fact that shares are the main theme of share purchase contracts), the question of whether these can be considered as specific qualifications (“representations and guarantees”) under Article 219/1 tCO is controversial4. Representations and guarantees come into effect on the day of the sales contract. If the closure occurs at a later date, insurance and guarantees will be re-issued. This is done on the closing date by a “Bring down” certificate. It is also said that the date has changed and that all parties agree. The High Court found that the explicit safeguards in the correct interpretation of the G.S.O. were only guarantees and did not include insurance as such. With respect to the particular facts of the case at issue, the judge found that the following points were clearly represented in the decision: this distinction is important because damages are calculated differently for breach of the guarantee and damages for misrepresentation – in general, a right to misrepresentation is more advantageous to a stock buyer than a right to a breach of security.