„Knowledge or knowledge of the seller means real knowledge of [the names of senior managers and sometimes directors].“ The main difference between these two species is that constructive knowledge must be investigated, since the parties legally believe that they are part of it. It is important to distinguish between these two types of knowledge, as they can have a significant effect in determining whether a party is responsible or not. Seller: The seller is clearly encouraged to maintain the list of „knowledge people“ because it limits their risk. But perhaps more importantly, sellers often – and rightly want – to limit the number of people who are aware of the agreement. How can a salesperson feel comfortable giving insurance and guarantees qualified by the knowledge of people who do not even know these representations and guarantees because they know nothing about the agreement? They can`t. Despite the strong arguments that each party can present, according to ABA Private Target Mergers – Acquisitions Deal Point Study, the market has been constantly and inexorably shifted towards the use of a constructive knowledge standard for 2016-2017. Twelve years ago, constructive knowledge was used in a small majority of degrees (61% of the time). Today, the standard of constructive knowledge is used in 82 percent of the time. To understand the exact nature of risk allocation in a qualified representation of knowledge, one must also understand what it means for a party to have „knowledge“. Why define knowledge? „Knowledge of the seller“ or „knowledge of the seller,“ or any other qualification of similar knowledge, refers to the actual or constructive knowledge of a director or agent of the seller or company, upon request. At other times, it is constructive to know how this provision creates a standard of behaviour to measure the knowledge of the seller: subordinate knowledge is attributed to a party if it is within the scope of its authority or employment, or its relationship with another party or its responsibility to another party. This knowledge is attributed to the fact that the facts in question are not sought and that it is the duty of that person to be aware of this information. The importance of these concerns has led to an almost universal trend to the introduction of the definition of knowledge to a list of parts of knowledge (i.e.
a list of individuals or titles specifically identified). In other words, practitioners use the definition of knowledge to tell a court whose knowledge can (and should) be served on the seller. „Knowledge is good,“ says Faber College`s motto. Of course, the avocado basket is what they mean by „knowing“? The seller`s representations are often qualified by the knowledge of the seller. In acquisition contracts, knowledge can mean different things. It is sometimes real knowledge: in addition, one of the most important distinctions between real and constructive knowledge is the obligation to investigate imposed by a standard of constructive knowledge. Even if a party is subject to a real standard of knowledge, it cannot simply be ostrich. In a recent U.S.
Supreme Court case, the doctrine of voluntary blindness was adapted by criminal law and applied in the context of a civil patent infringement proceeding. The Supreme Court described the doctrine as follows: Be prepared to negotiate the many fine points involved in the preparation of a sales contract. Lawyers on both sides are trying to get a fair result, while getting what the clients want – an agreement. On the other hand, buyers generally argue in favour of a standard of constructive knowledge: in some of the representations and guarantees of the sales contract, a qualified as „To the best of the seller`s knowledge… Added to excuse the seller of responsibility after the conclusion.