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A discussion of mergers and acquisitions (M&A) due diligence in the electronic information age concludes that dealing with every new law and concept would be prohibitively expensive, but, at the same time, E-DD (non-IP/electronic due diligence) that is in line with circumstances, risks, and the business of the target company is a new requirement. Included in E-DD are updating of acquisition agreements and looking anew at the emphasis of existing due diligence. The economy has migrated from goods to intellectual property (IP) and information, which has changed due diligence to include reviews for open source software and its possible viral effect. IP matters are often seen in the headlines, but E-DD focuses on issues arising from doing business electronically and information that tends not to enjoy intellectual property protection. Questions that companies have to answer are highlighted and are related to such issues as currency of acquisition agreement wording, specific important E-DD laws, the advisability of a representation with all applicable law, and whether duel diligence or a mere representation is preferable. E-DD liabilities often create an affirmative need to investigate rather than depending on representations in acquisition agreements. For instance, in modern practice, a bad match between privacy policy text and practice could mean more liability or risk in reputation and business disruption when compared for risk associated with many matters looked at in traditional due diligence. Review is required, rather than only assurances.
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