Model Closing Opinion Letter (Annotated) - American Bar Association

2 Model Closing Opinion Letter (Annotated)
ment will not be given effect under the circumstances contemplated,
or (ii) the Opinion Recipient would not have a remedy for a breach
of an undertaking by the Company. See TriBar Report § 3.1.
(b) The Remedies Opinion also means that the courts will enforce
provisions of the agreement that are unrelated to the concept of
breach, such as a chosen-law provision, or a provision as to how the
agreement can be amended.
(c) The Company’s obligations covered by the Opinion include
promises made by the Company, duties imposed on it, corresponding
rights granted to others, and remedies against the Company
conferred by the agreement. In the opinion of the Legal Opinion
Committee, the safest course, and the one followed by most lawyers,
is to analyze the “legal, valid, and binding” status of every obligation
of the Company specified in the agreement. Of course, the issue
of concern regarding the enforceability of the provision may not be
covered by the Opinion because it arises under a law generally understood
not to be covered by the Opinion (see “Which Laws Are Addressed?,
p. 71, below) or under the law of a jurisdiction not
included in the law of the Opining Jurisdiction. If there is doubt as
to the enforceability of an obligation of the Company in the agreement,
and the matter is covered by the Opinion, a limitation such
as “We express no opinion with respect to [the specified provision]”
should be included in the Opinion.
(d) For example, provisions that purport to establish the nature
and extent of relief for defaults may raise problems. Thus, counsel
must consider the validity of acceleration clauses and clauses affording
secured creditors the right to take and sell collateral.
(e) Other clauses to be considered as to enforceability include
those releasing a party prospectively from liability for its own
wrongs, affording indemnification for securities law violations, requiring
waiver of the obligations of good faith, fair dealing, diligence,
and reasonableness, prohibiting a party from bringing legal
action except in a specified forum, shortening or extending the statute
of limitations, or waiving the right to a jury trial. Similarly to
be considered are clauses relating to determination of damages,
provisions imposing liquidated damages, entitlement to attorneys’
fees and other costs, and releasing a party from, or requiring in-
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