Article 5 includes the managerial powers of authority and assurances of the buyer and corresponds to this extent with Article 4 of the master contract. It is assured by the buyer that the company is properly organised, that it actually exists and complies with all the statutory regulations. In addition, the power of authority of the director of the company to conclude the business in question is confirmed. As mentioned in the comments on Article 4, if these assurances are false, they can lead to the other contracting party having a right to challenge the contract on account of incorrect assurances.

The assurance in this case is insufficient for the above reason. On the contrary, it must on the one hand be proved by the buyer by the submission of appropriate documents that he/it exists in the legal form as stated and, on the other, that the persons involved in the negotiations are authorised to act for the buyer.

The further comments made on Article 4 also apply to Article 5 analogously.

For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.

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