CHAPTER 15.04. Execution and Delivery

• Jurisdiction: United States

15.04. Execution and Delivery

As discussed elsewhere, the remedies opinion is inherently an opinion that a transaction document is enforceable as a contract between the borrower and, usually, the opinion recipient. Accordingly, all of the requirements necessary for contract formation must be determined to exist or be assumed. One of the essential elements of contract formation is that the transaction documents have been executed and delivered by the parties. Therefore, the opinion recipient will often want an opinion that the borrower has executed and delivered the transaction documents. An example of an execution and delivery opinion is: "The Borrower has executed and delivered the transaction documents."⁹⁰ Because execution and delivery are formal requirements of contract formation, the "execution and delivery" opinion along with opinions on entity status and organization, entity power, authorization of the transaction, no violation of laws, and no required government consents are the building block opinions for the remedies opinion.⁹¹

For purposes of a Delaware execution and delivery opinion, "execution" means that, to the extent Delaware law governs the execution of the transaction documents, the proper borrower party, whether an individual or the officer or manager or other person who has signed the transaction documents on behalf of a borrower entity, has signed the transaction documents and, if the borrower is an entity, that such person was authorized to execute the transaction documents on behalf of the borrower.⁹²

For purposes of a Delaware execution and delivery opinion, "delivery" means that, to the extent Delaware law governs the delivery of the transaction documents, the borrower has in some manner given the executed transaction documents to the opinion recipient with the intent to create a contract. The use of the phrase "execution and delivery" is likely redundant because delivery is a component of execution, but use of the phrase continues.

The execution opinion must be analyzed to assure, as a matter of contract law, that the transaction documents have been signed by the party to be bound by the documents. This is a matter for the substantive laws governing the documents, and not the law governing the borrower.⁹³ However, given the components of "execution," such as authorization, the laws governing the borrower may also apply, and those laws may differ from the laws governing contract formation. For example, the transaction documents...