Legal opinions—uses, scope and structure
Legal opinions—uses, scope and structure

The following Banking & Finance guidance note provides comprehensive and up to date legal information covering:

  • Legal opinions—uses, scope and structure
  • What is a legal opinion?
  • When do you use a legal opinion?
  • Who can rely on the legal opinion and in what circumstances?
  • Scope of legal opinions
  • Scope of legal opinions in cross-border transactions
  • Structure of a typical legal opinion

Legal opinions are used in the vast majority of financing transactions. They are usually either a condition precedent to funding or a condition precedent to the signing of the finance documentation. They provide the addressee of the legal opinion with information on the legal risks involved in a transaction. Although they are seen across many different types of financing transactions, they can be tricky to deal with from both a legal and practical perspective.

This Practice Note explains:

  1. what legal opinions are

  2. when they are used

  3. who can rely on them

  4. what they cover

  5. how legal opinions are used in cross-border transactions, and

  6. the structure of a typical opinion letter

For more information, see Practice Notes:

  1. Conditions precedent

  2. Instructing and managing local counsel, and

  3. Drafting or reviewing legal opinions in loan transactions

For an example of an English law legal opinion, see Precedent: Legal opinion letter: English borrower entering into an unsecured bilateral facility agreement.

What is a legal opinion?

A legal opinion is a letter which sets out opinions as to matters of law. It does not cover factual matters.

Who provides it?

Legal opinions are typically provided by a law firm.

In a small number of cases, they are provided by in-house counsel where, for example, in-house counsel are better placed to provide the opinion than an external law firm. The most common