With the purchase of a company, duties of disclosure are assumed with regard to information by the seller on the profits, retained earnings and sales of the company being sold. This information may also form the basis of liability under cic unless it concerns special qualities of the company being sold within the meaning of =A7 459 of the Civil Code. In addition, incorrect numerical data submitted by the seller during the course of contract negotiations may give rise to liability based on the principles of negligence on contracting.

The seller only has a very limited duty of disclosure as far as other information is concerned. This is based on the principle that it falls within the scope of responsibility of the buyer to establish whether the purchase is actually worthwhile from a financial point of view. The seller is basically only obliged to disclose facts which should not be withheld based on the principle of good faith or which endanger the purpose of the contract.

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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