East Asian Journal of Business Economics (EAJBE) (동아시아경상학회지)

East Asia Business Economics Association (동아시아경상학회)
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The Significance of Contract Law for Efficient Mergers and Acquisitions (M&A) Procedure

  • Eungoo KANG (Becamex School of Business, Eastern International University)
  • Received : 2023.03.01
  • Accepted : 2023.12.26
  • Published : 2023.12.30
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Abstract

Purpose - This study aims to examine the role of contract law in mergers and acquisitions (M&A) and to examine whether or not contract law is necessary in M&A. The study also discusses how contract law can be utilized in M&A, as well as some of the problems that arise from the use of contracts in this area. Research design, data, and methodology - To minimize bias and errors, this study used only peer-reviewed articles and book excluding internet news articles, conference papers, and dissertations. For a well-organized screen and selection process, the author conducted the extraction procedure thoroughly to eliminate some duplicated resources. Result: This study indicates that complex deals carry a high risk but also have the potential to yield substantial revenue for stakeholders. Thus, contract law is essential to the success of M&A because it helps to define the (1) terms of the transaction, (2) reduces risk, (3) offers legal safeguards, and ensures that the (4) agreement is enforced. Conclusion - This study concludes that an understanding of contract law is essential to the profitable merging of two businesses. The application of contract law provides a mechanism for enforcing the agreement, which can increase the likelihood that the stipulations of the M&A will be satisfied.

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References

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