Contract drafting for project acquisitions

Drafting contracts for project acquisitions in Finland requires a careful balance between legal precision, commercial clarity, and local regulatory compliance. While Finnish law offers flexibility and a relatively low level of formalism, the importance of well-structured agreements cannot be overstated, especially in cross-border transactions.

Governing law and language

Although parties are generally free to choose the governing law of their contract, it is strongly recommended to apply Finnish law when acquiring Finnish projects. This is particularly important for share transfers and asset deals, which must comply with Finnish legal formalities regardless of the contract’s governing law. Moreover, many operational and tax-related clauses will need to be tailored to Finnish legal standards.

Contracts are commonly drafted in English, especially in international transactions. Finnish courts and authorities accept English-language documents, but clarity and precision are essential to avoid misinterpretation.

Structure and formalities

Finnish law does not impose excessive formalities on the transfer of shares or most assets. A share transfer can be executed by a simple agreement without notarization or registration.

Asset deals are similarly straightforward, except for the transfer of real property, which requires the involvement of a municipal officer and registration with the Land Register. It is common practice to supplement the main sale and purchase agreement (SPA) with separate transfer deeds for specific asset categories (such as shares, real estate, licenses, and key contracts) to facilitate filings and protect sensitive commercial information from public disclosure.

Key contractual elements

A robust SPA should include detailed provisions on purchase price and adjustments, conditions precedent, representations and warranties, indemnities, covenants, and dispute resolution.

Depending on the nature of the project (e.g., energy, infrastructure, or real estate), sector-specific regulations may impact contract drafting.

For example, energy projects must comply with energy market and grid requirements, grid connection agreements, and environmental permits. Additionally, securing the project’s land use requires attention to zoning laws, land use rights, and building permits.

Before a transaction is concluded, these specific requirements are usually subjected to the buyer’s scrutiny in due diligence. The transaction contracts should properly reflect the findings of such scrutiny and allocate risks accordingly.