Due diligence and disclosure

Scope of due diligence

What is the typical scope of due diligence in your jurisdiction? Do sellers usually provide due diligence reports to prospective buyers? Can buyers usually rely on due diligence reports produced for the seller?

No legal requirements exist for the performance of due diligence in Greece. A typical buyer will arrange for legal, accounting and tax due diligence exercises before deciding on an acquisition. Depending on the type of activity with which the target is engaged, a technical or an environmental due diligence exercise may also be advisable. In any event, due diligence is based on the buyer’s risk profile. Sellers may also provide due diligence reports to prospective buyers, most frequently in cases of a bidding procedure or in order to ensure a time-efficient sale. Buyers may rely on due diligence reports produced by the seller, to the extent that the advisers have consented to such reliance and the buyer’s internal policies permit it to rely on an adviser whose duty of care is primarily owed to the seller.

Liability for statements

Can a seller be liable for pre-contractual or misleading statements? Can any such liability be excluded by agreement between the parties?

In the case of Greek law-governed agreements, parties are by law obliged to act according to boni mores and transactions usage. Pre-contractual liability applies to losses caused to one counterparty by the other counterparty’s wilful misconduct or negligence. Any restriction of these liabilities is subject to the generally applicable limitations on Greek law liability restrictions (see question 28).

The joint liability of the transferor and the transferee in case of transfer of business by special succession cannot be waived.

Publicly available information

What information is publicly available on private companies and their assets? What searches of such information might a buyer customarily carry out before entering into an agreement?

The recently set up Greek commercial registry includes information on the target company’s articles of association, its representation, financial statements published and good standing. Certificates can be issued on these matters upon request.

There are also publicly available records in land registries and cadastres on rights in rem effected on real estate properly and assignments on business receivables. Search and review are publicly accessible provided that one knows the particulars of the assets under review and their owner.

Impact of deemed or actual knowledge

What impact might a buyer’s actual or deemed knowledge have on claims it may seek to bring against a seller relating to a transaction?

In the case of Greek law-governed contracts, such knowledge may eliminate the buyer’s ability to seek compensation for losses arising from breach of representations and warranties provided by the seller.