Legal opinions—uses, scope and structure

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

  • Legal opinions—uses, scope and structure
  • What is a legal opinion?
  • Who provides it?
  • Who is it prepared for?
  • When do you use a legal opinion?
  • As a condition precedent
  • In restructuring and insolvency scenarios
  • Who can rely on the legal opinion and in what circumstances?
  • Who can rely on the legal opinion—bilateral transactions
  • Who can rely on the legal opinion—syndicated transactions
  • More...

Legal opinions—uses, scope and structure

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 and, as such, should be discussed and agreed as soon as possible in the transaction process.

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. The letter will be made up of the legal opinions themselves, along with a set of assumptions and qualifications which usually make up the majority of the letter.


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