Covenants | France | Global Private M&A Guide - Limited External Content

Is a noncompete common?

Frequency/market practice: Noncompete is very common depending on the context. Noncompete provisions may rarely apply if the seller is an investment fund or if the seller and the target act within the same industry and market.

Is it common to use waterfall or blue pencil methods to interpret contractual provisions?

Frequency/market practice: Waterfall/blue pencil provisions are not applicable in France.

Are nonsolicitation provisions (of employees) common?

Frequency/market practice: Very common depending on the context (see comments related to noncompete). Duration is generally similar to noncompete.

Are nonsolicitation provisions (of customers) common?

Frequency/market practice: Very common depending on the context (see comments related to noncompete). Duration is generally similar to noncompete.

Are seller restrictions usually imposed on the target business between signing the purchase agreement and closing?

Frequency/market practice: Very common.

Is there broad access to books, records and management between signing and closing?

Frequency/market practice: Rarely. There is a risk of de facto management by the buyer under French law.

Is it common to update warranty disclosure or notify of possible breach?

Frequency/market practice: Very common. Updating disclosure schedules and notification of a possible breach between signing and closing is very common. However, it is usually negotiated that disclosure must not prevent or limit the buyer's right to indemnification. The buyer's right to walk away where there is a material update/breach between signing and closing may be negotiated (issues linked to MAE).

Global Private M&A Guide - Limited External Content

France

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