Global Private M&A Guide - Limited External Content

Vietnam

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Limitations on liability
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Limitations on liability Start Comparison
What is the common cap amount (as a percentage of purchase price)?

Frequency/market practice: Typically 100% of the purchase price for fundamental warranties and in the region of 20% - 30% for other warranties.

Does the cap (and other liability limitations) apply to the whole agreement or just warranties (or particular terms)?

Frequency/market practice: Both are seen regularly.

What are the common exceptions to the cap?

Frequency/market practice: Title and authority warranties are the most common exceptions. Due to the unpredictability of the Vietnamese tax system (and tax officials), it is very difficult to have the seller accept an uncapped tax warranty.

Is a deductible or basket common?

Frequency/market practice: Both are seen regularly.

Is a de minimis common?

Frequency/market practice: Fairly common.

How long does seller liability survive?

Frequency/market practice: This differs case by case and subject to negotiation.

Are there any common carve-outs from limitation on seller liability (e.g., fraud, tax, key warranties)?

Frequency/market practice: fraud are mostly carve-outs from limitation on seller liability.

Is warranty insurance common?

Frequency/market practice: Rarely.

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