Appendix 5: Third-Party Legal Opinion Survey
The California State Bar Business Law Section's Task Force on Legal Opinions is gathering information about customary practices in California concerning third-party legal (closing) opinions.
We do not plan to disclose individual responses outside the Task Force. However, the Task Force may disclose to others compilations of the survey results and participants.
If you have any questions about this survey, please contact Morris Hirsch at (415) 765-3874.
Please return your survey response (by regular mail, fax or e-mail) by July 19, 2001, to:
400 California Street, 16th Floor
San Francisco, CA 94104
Fax: (415) 765-3391
Thank you very much for your assistance.
|Name of person completing survey:
Size of law firm:
a. up to 10 lawyers
b. 11 to 100 lawyers
c. more than 100 lawyers
Is your firm a multistate law firm?
Does your firm have an Opinion Committee (or a designated group of lawyers within your firm) that (1) sets firm policy for the delivery of legal opinions and/or (2) approves (or a member of which approves) a legal opinion before the firm delivers the opinion?
What is your current position in the firm? (Check all that apply.)
Chair of Opinion Committee
Member (but not Chair) of the Opinion Committee
Managing Partner of the firm
In-house General Counsel for the firm
In-house Ethics Counsel for the firm
Other. Please describe:
Unless otherwise indicated, all questions relate solely to your firm's customary practices when issuing third-party legal (closing) opinions under California law. This survey focuses on remedies opinions, as opposed to other types of legal opinions. Remedies opinions can be expressed in various ways, but essentially relate to the enforceability of one or more contracts.
1. In what types of transactions does your firm customarily issue remedies opinions (assuming any legal opinion is given in the transaction)?
a. Securities offerings
b. Mergers & acquisitions
c. Real estate sales
d. Loans, including loans:
i. Secured by personal property
ii. Secured by real estate
e. Lease transactions:
i. Personal property
ii. Real estate
f. Other types of transactions. Describe:
2. When giving a remedies opinion with respect to the enforceability of a contract, does your firm customarily consider the opinion to include:
a. Each and every provision of the contract.
b. Only the essential, material or some similar subset of the contract’s provisions.
c. My firm believes 2.b is customary, but as a precaution we prepare remedies opinions as if 2.a were applicable.
3. Does your firm customarily include a "generic exception"* when it issues remedies opinions?
c. Only in certain types of transactions. Describe:
* Specific forms of a "generic exception" vary, but here is an example: Our opinion is subject to the qualification that certain provisions of the Agreement may be unenforceable, but such unenforceability will not, subject to the other exceptions, qualifications and limitations contained in this opinion letter, render the Agreement invalid as a whole or substantially interfere with realization of the principal benefits intended to be provided by the Agreement.
4. Please indicate which, if any, of the following types of contractual provisions your firm customarily expressly excludes from its remedies opinions:
a. Choice-of-law provisions.
b. Covenants not to compete.
c. Provisions for penalties, liquidated damages, acceleration of future amounts due (other than principal) without appropriate discount to present value, late charges, prepayment charges, or increased interest rates upon default.
d. Time-is-of-the-essence clauses.
e. Confession of judgment clauses.
f. Provisions that contain a waiver of broadly or vaguely stated rights.
g. Provisions that contain a waiver of the benefits of statutory, regulatory, or constitutional
rights, unless and to the extent the statute, regulation, or constitution explicitly allows waiver.
h. Provisions that contain a waiver of unknown future defenses.
i. Provisions that contain a waiver of rights to damages.
j. Provisions that contain a waiver of obligations of good faith, fair dealing and commercial reasonableness.
k. Provisions that attempt to change or waive rules of evidence or fix the method or quantum of proof to be applied in litigation or similar proceedings.
l. Provisions for the appointment of a receiver.
m. Forum selection clauses and consent to jurisdiction clauses (as to personal jurisdiction or subject matter jurisdiction).
n. Provisions appointing one party as an attorney-in-fact for an adverse party.
o. Waivers of rights to jury trials.
p. Provisions requiring arbitration of disputes arising out of the transaction.
q. Provisions that by their express terms state that fewer than all parties to the contract are entitled to recover attorneys’ fees and expenses.
r. Provisions that prohibit oral modifications.
s. Indemnity of a party for damages arising out of its own misconduct.
t. Self-help remedy provisions.
u. Indemnification for securities law liabilities.
v. Voting agreements.
w. Other. Describe:
5. Which, if any, of the types of contractual provisions referred to in Question 4 does your firm customarily consider to be excluded by an “equitable principles limitation”** expressly or impliedly included in an opinion? Specify by reference to letters in Question 4:
** A typical “equitable principles limitation” is as follows: The enforceability of the Company’s obligations under the Agreement is subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law.
6. In real property transaction opinions, does your firm customarily refuse to issue opinions covering:
a. Land use matters.
b. Environmental matters.
e. Assignments of rents.
f. Other. Describe:
7. Does the following paragraph substantially describe your firm's customary practices in deciding whether and to what extent to conduct legal research in support of a remedies opinion? When we give a remedies opinion: (i) we do not conduct legal research as to any provision of a contract covered by the opinion unless, in applying reasonable professional judgment to that provision, we recognize, without conducting legal research, that there is a not insignificant degree of uncertainty as to the enforceability of that provision based on the existence of California law directly applicable to our client, the transaction, or both; and (ii) we rely on general contract law principles to support an opinion as to the enforceability of such a provision in the absence of California law that we, in applying reasonable professional judgment to that provision, recognize, in accordance with (i) above, as being directly applicable to our client, the transaction, or both.
b. No. How do your firm's customary practices substantially differ from this?
8. a. Does your firm customarily issue legal opinions governed by the 1991 Legal Opinion Accord of the ABA Business Law Section?
b. If you answered “Yes” in Question 8.a, are your firm’s ABA Accord legal opinions customarily governed by the “California Provisions” as defined in the California State Bar Business Law Section’s 1992 Report on the Third-Party Legal Opinion Report of the ABA Section of Business Law?
c. If you answered “Yes” in Question 8.a, are your firm’s ABA Accord legal opinions in real property transactions customarily issued in accordance with the 1995 California Real Property Legal Opinion Report and the 1998 First Supplement to 1995 California Real Property Legal Opinion Report?
9. [Answer only if your firm customarily issues remedies opinions under the law of states other than California, as well as under California law.] Do your firm's customary practices (as to the form of the opinion or exceptions/limitations/qualifications, as to legal research supporting the opinion, or otherwise) substantially differ when your firm issues remedies opinions under the law of states other than California than when issuing remedies opinions under California law?
b. Yes. Please describe the substantial differences:
10. Would your responses to any of the above questions substantially differ when your firm is requesting a legal opinion rather than issuing one?
b. Yes. Please describe the substantial differences:
11. Would the chair of your firm’s Opinion Committee or another representative of your firm be willing to serve as an advisor to the Business Law Section’s Task Force on Legal Opinions?
b. Yes. If other than the person completing this survey, please specify:
12. [Optional] Please attach the form(s) of California remedies opinion, and the applicable exceptions/limitations/qualifications, which your firm customarily issues.
13. [Optional] Please note any additional comments you think would be useful to the Task Force on Legal Opinions.
Thank you very much for completing this survey. Please return your response by July 19, 2001, to the address set forth in the Introduction.
Appendix 6 / Report on Third-Party Remedies Opinions