In Which are Incorporated the Principal Concepts
of
The ABA Section of Business Law
Legal Opinion Accord
and
The ABA Section of Real Property,
Probate and Trust Law
and
The American College of Real
Estate Lawyers
Report on Adaptation of the
Legal Opinion Accord
A REPORT OF THE JOINT ABA/ACREL COMMITTEE COMPRISING:
The American Bar Association, Section of Real Property, Probate and Trust Law, Committee on Legal Opinions in Real Estate Transactions, Subcommittee on Creation of an Inclusive Opinion: David L. Miller, Washington, D.C., Co-Chair; Mark R. Spradling, Houston, Texas, Co-Chair; Benson Joel Barr, Southfield, Michigan; Gurdon H. Buck, Hartford, Connecticut; Frederic W. Clark, Philadelphia, Pennsylvania; Dianne S. Coscarelli, Cleveland, Ohio; William B. Dunn, Detroit, Michigan; Kenneth P. Ezell, Jr., Nashville, Tennessee; Timothy W. Grooms, Little Rock, Arkansas; Karl B. Holtzschue, New York, New York; Raymond Iwamoto, Honolulu, Hawaii; Thelma Rivera-Miranda, Hato Rey, Puerto Rico; Robert A. Thompson, San Francisco, California; and William L. Thompson, Jacksonville, Florida; and
AMERICAN COLLEGE OF REAL ESTATE LAWYERS ATTORNEYS’ OPINIONS COMMITTEE:
Edward J. Levin, Baltimore, Maryland, Chair; Portia O. Morrison,
Chicago, Illinois, Co-Vice Chair; Charles S. Sokoloff, Smithfield, Rhode
Island, Co-Vice Chair; Robert A. Thompson, San Francisco, California, Co-Vice
Chair; Charles H. Andresen, Duluth, Minnesota; David C. Auten, Philadelphia,
Pennsylvania; Drake M. Batchelder, Ft. Lauderdale, Florida; Wm. Terry Bray,
Austin, Texas; Stephen A. Bromberg, Birmingham, Michigan; Gurdon H. Buck,
Hartford, Connecticut; Mert F. Buckley, Wichita, Kansas; James A. Cole,
Baltimore, Maryland; William B. Dunn, Detroit, Michigan; A. James Elliott,
Atlanta, Georgia; K. Gregory Erwin, Houston, Texas; Howard M. Feuerstein,
Portland, Oregon; Joseph Finley, Minneapolis, Minnesota; W. Bebb Francis,
III, San Antonio, Texas; Catherine T. Goldberg, Albuquerque, New Mexico;
Martin Gottlieb, Boston, Massachusetts; Donald J. Gralen, Chicago, Illinois;
Samuel F. Hatcher, Atlanta, Georgia; Robert O. Hetlage, St. Louis, Missouri;
Karl B. Holtzschue, New York, New York; John B. Hood, Rochester, New York;
Morris C. Kellett, Philadelphia, Pennsylvania; Henry M. Kittleson, Lakeland,
Florida; Daniel L. Klein, Wilmington, Delaware; Michael Levin, Hartford,
Connecticut; Timothy Martin, Louisville, Kentucky; Thomas A. Mason, Cleveland,
Ohio; William L. McCown, Milwaukee, Wisconsin; K.C. McDaniel, New York,
New York; Russell A. McNair, Jr., Detroit, Michigan; O’Malley M. Miller,
Los Angeles, California; Allan E. Mulligan, Bloomington, Minnesota; J.
Fred Powell, Birmingham, Alabama; Laurence G. Preble, New York, New York;
Myrna Putziger, Boston, Massachusetts; Susan M. Reid, San Franciso, California;
Richard L. Reppert, Cleveland, Ohio; Leon J. Reymond, Jr., New Orleans,
Louisiana; Thomas G. Roberts, Los Angeles, California; James Rosenbloom,
Chicago, Illinois; Stanley M. Samuels, Portland, Oregon; Richard W. Scarritt,
Kansas City, Missouri; Leopold Z. Sher, New Orleans, Louisiana; David S.
Sidor, Columbus, Ohio; Gary A. Taback, Southfield, Michigan; Courtland
Traver, McLean, Virginia; Ira J. Waldman, Los Angeles, California; James
H. Wallenstein, Dallas, Texas; James G. Wheeler, Jr., St. Johnsbury, Vermont;
and Jeffrey P. Zucker, Las Vegas, Nevada.
Inclusive Real Estate Secured Transaction Opinion
I. INTRODUCTION
The ABA Legal Opinion Accord and the report of which it is a part are impressive in many ways, and have received some acceptance, but they have yet to become the nationwide standard that their authors had hoped. Particularly given the availability of state bar association reports in many jurisdictions, practitioners have evidenced mixed responses to learning a new body of legal opinion practices. This is at least in part because the Accord looks and perhaps is difficult to master and the Accord omits coverage of many substantive areas common to legal opinions in real estate transactions.
To address at least the latter issue, a joint committee of the ABA and the American College of Real Estate Lawyers published a report adapting the Accord for loans secured by real property. But, if the Accord is difficult to master, it is even a more challenging task to achieve a clear and comprehensive knowledge of how the Accord works as supplemented—and modified—by the ABA/ACREL Report.
The principal goal of this report is to facilitate understanding of the ABA Business Law Report (including the Accord) and the ABA/ACREL Report (collectively, the "Opinion Reports").
II. FALSE BREVITY
One of the fundamental approaches of the Accord, which the ABA/ACREL Report also follows, is that each legal opinion letter that is to be governed by the Accord (or the Accord as modified and supplemented by the ABA/ACREL Report) will incorporate those documents by reference. This would result in very short opinion letters, and in the ability to quickly check any variations between a given opinion letter and the Accord or the ABA/ACREL Report.
While brevity undoubtedly is a virtue (and is the soul of wit), this brevity is only skin deep. Behind the short-form of Accord opinion lies a complex set of code-like and specific interpretive rules that have no history of interpretation by courts. No attorney will or should give or receive an opinion that incorporates the Accord or the ABA/ACREL Report without being sufficiently comfortable that he or she understands those documents and how they are likely to be interpreted in the future. Few have achieved this level of comfort.
III. INCLUSIVE OPINION FORM
Despite these difficulties, we believe that the goals of the Opinion Reports are worth pursuing and that these publications are worth understanding.
The Joint Committee believes that it would enhance the understanding of the Opinion Reports if we could show how an opinion might look if it included the principal concepts contained in these two published opinion letter reports, without specifically referring to them; that is, a kind of one stop shopping. The form of opinion letter which follows this brief introduction attempts to do just that for real estate loans, the most common kind of real estate transactions giving rise to third-party legal opinion letters.
This form of opinion letter is intended primarily to serve an educational purpose, not to serve as a model. We also recognize that this form of opinion is not the only way to set forth the positions stated in the Opinion Reports. This form of opinion letter perhaps gives rise to the opposite of the risk of false brevity, the risk of false comprehensiveness; nor does this form expressly cover each principle stated in the Opinion Reports. Finally, both the Opinion Reports permit private ordering between the parties to each transaction, the use of which would result in changes to the opinions, assumptions and other qualifications in this form.
The Opinion Reports both are useful and constitute significant progress
toward achievement of a national consensus for real estate opinion practice.
We intend through this "inclusive" form of opinion letter to enhance understanding
of the meaning of the Opinion Reports.
INCLUSIVE REAL ESTATE SECURED TRANSACTION OPINION
[date]
[Name and Address
of Opinion Recipient]
Re: $[__________] Loan (the "Transaction") from [_____________________] ("Lender") to [________________________] (the "Client")
Ladies and Gentlemen:
We provide this Opinion Letter to you at the request of the above referenced Client pursuant to Section [_____] of the [Agreement] described below.
I.
BACKGROUND
1.1 Documents Reviewed. We have acted as [special] counsel to the Client in connection with the preparation of the following documents relating to the Transaction:
(b) [Mortgage/Deed of Trust/Deed to Secure Debt] dated as of __________, executed by the Client (the "Mortgage") with respect to certain property including real property located at ______________________ (the "Real Property").
(c) Assignment of Leases and Rents dated as of ________, executed by the Client (the "Assignment of Leases").
(d) Security Agreement dated as of __________, executed by the Client (the "Security Agreement").
(e) Loan Agreement dated as of ____________, executed by the Client and Lender (the "Agreement").
(f) [[Two] unfiled] Uniform Commercial Code Financing Statements executed by the Client (the "Financing Statements").
1.3 Opining Jurisdiction. The Law (as defined in the attached Glossary) covered by the opinions expressed in this Opinion Letter is limited to the Law of the State of [_____] (the "State")[, and the General Corporation Law of the State of Delaware ]. Except as set forth in Paragraphs 2.1 and 2.2 below, we express no opinion concerning the Laws of any other jurisdiction, [the other Laws of Delaware,] or the effect thereof.
1.4 Scope of Review. In connection with the opinions hereinafter set forth, we have limited the scope of our review of the documents related to the Transaction to [originals/photocopies of] the Transaction Documents and the Financing Statements. In addition, in connection with the opinions hereinafter set forth, we have reviewed such other documents and certificates of public officials and certificates of representatives of the Client, and have given consideration to such matters of law and fact, as we have deemed appropriate, in our professional judgment, to render such opinions.
1.5 Reliance Without Investigation. We have relied, without investigation or analysis, upon information in Public Authority Documents (as defined in the attached Glossary). Except to the extent the information constitutes a statement, directly or in practical effect, of any legal conclusion at issue, we have relied, without investigation or analysis, upon the information contained in representations made by the Client in [Sections ____of] the Agreement and on information provided [by officials of the Client] [in certificates of officers of the Client], which we reasonably believe, in each case, to be an appropriate source for the information. Except to the extent the information constitutes a statement, directly or in practical effect, of any legal conclusion at issue, we have relied, without investigation or analysis, upon information provided to us by Lender, as set forth in [________].
1.6 Opinions of Other Counsel. We note that various issues concerning [specify legal issues] are addressed in the opinion of [_______________] (the "Other Counsel"), separately provided to Lender. [In rendering the opinions set forth below, we have relied upon the information contained in such opinion of the Other Counsel without investigation or analysis, and we express no opinion with respect to those matters.]
II.
OPINIONS
Based upon and subject to the foregoing and to the qualifications set forth below, we are of the opinion that:
2.1 Status. The Client is a [corporation], validly existing in good standing in its jurisdiction of organization.
2.2 Authorization. All actions or approvals by the Client, and its [shareholders], necessary to bind the Client under the Transaction Documents have been taken or obtained.
2.3 Execution. The Client has duly executed and delivered the Transaction Documents and the Financing Statements for valid consideration.
2.4 Remedies Opinion. The Transaction Documents are legal, valid, binding and enforceable against the Client in accordance with their terms. [That is, under the law of contracts of the Opining Jurisdiction, and other laws of the Opining Jurisdiction that we, in the exercise of customary professional diligence would reasonably recognize as being directly applicable to the Client, the Transaction, or both: the Transaction Documents form a contract; a remedy will be available with respect to each agreement of the Client in the Transaction Documents or such agreement will otherwise be given effect; and any remedy expressly provided for in the Transaction Documents will be given effect as stated.]
2.5 Form of Security Documents. The Security Documents are in a form sufficient to create a lien on or security interest in all right, title and interest of the Client in the Collateral, except to the extent the Collateral includes items or types of Personal Property (as defined in the attached Glossary) in which a security interest cannot be created under Article 9 of the Uniform Commercial Code.
2.6 Usury Opinion. Assuming that no fees, charges, benefits, or other compensation will be paid, directly or indirectly to Lender or for Lender’s benefit, except as specified in the Transaction Documents, and assuming that no amounts to be paid as specified in the Transaction Documents constitute a penalty, the Transaction, as evidenced by the Transaction Documents, does not violate the usury laws of the State.
2.7 No Breach or Default Opinion. Execution and delivery by the Client of, and performance of its agreements in, the Transaction Documents do not (i) violate the [articles or certificate of incorporation or bylaws; partnership agreement or certificate] of the Client, (ii) [to the best of our Actual Knowledge (as defined in the attached Glossary)], breach, or result in a default under, any existing obligation of the Client under the Other Agreements specified in Attachment [__] hereto (the "Specified Other Agreements"), or (iii) [to the best of our Actual Knowledge] breach or otherwise violate any existing obligation of the Client under any Court Order which is identified in Attachment [__] hereto (the "Specified Court Orders"), which the Client has certified to us are the only Court Orders. Our Opinion in this Paragraph does not extend to any action or conduct of the Client that a Transaction Document may permit but does not require, except to the extent that (i) such action or conduct takes place simultaneously with, and (ii) we had Actual Knowledge that it constituted part of, the consummation of the Transaction.
2.8 No Violation of Law Opinion. Execution and delivery by the Client of, and performance by the Client of its payment obligations in, the Transaction Documents neither are prohibited by applicable provisions of statutory law or regulation of the State nor subject the Client to a fine, penalty or other similar sanctions under, any statutory law or regulation of the State. Our opinion in this Paragraph relates only to statutory laws and regulations that we, in the exercise of customary professional diligence, would reasonably recognize as being directly applicable to the Client, the Transaction, or both.
III.
QUALIFICATIONS
Notwithstanding any provision in this Opinion Letter to the contrary, the foregoing opinions are subject to the following additional qualifications:
3.1 Assumptions. In rendering the foregoing opinions, we have relied, without investigation, upon the assumptions set forth below unless in a given case the particular assumption states, directly or in practical effect, a legal conclusion expressed in the opinion:
(b) The Client holds the requisite title and rights to any property involved in the Transaction.
(c) Each party to the Transaction (other than the Client) has satisfied those legal requirements that are applicable to it to the extent necessary to make the Transaction Documents enforceable against it.
(d) Each party to the Transaction (other than the Client) has complied with all legal requirements pertaining to its status as such status relates to its rights to enforce the Transaction Documents against the Client.
(e) Each document submitted to us for review is accurate and complete, each such document that is an original is authentic, each such document that is a copy conforms to an authentic original, and all signatures on each such document are genuine.
(f) Each Public Authority Document is accurate, complete, and authentic and all official public records (including their proper indexing and filing) are accurate and complete.
(g) There has not been any mutual mistake of fact or misunderstanding, fraud, duress or undue influence.
(h) The conduct of the parties to the Transaction has complied with any requirement of good faith, fair dealing and conscionability.
(i) Lender and any agent acting for Lender in connection with the Transaction have acted in good faith and without notice of any defense against the enforcement of any rights created by, or adverse claim to any property or security interest transferred or created as part of, the Transaction.
(j) There are no agreements or understandings among the parties, written or oral, and there is no usage of trade or course of prior dealing among the parties that would, in either case, define, supplement or qualify the terms of the Transaction Documents.
(k) All statutes, judicial and administrative decisions, and rules and regulations of governmental agencies, constituting the Law of the Opining Jurisdiction are generally available (i.e., in terms of access and distribution following publication or other release) to lawyers practicing in the Opining Jurisdiction, and are in a format that makes legal research reasonably feasible.
(l) The constitutionality or validity of a relevant statute, rule, regulation or agency action is not in issue unless a reported decision in the Opining Jurisdiction has specifically addressed but not resolved, or has established, its unconstitutionality or invalidity.
(m) Other Agreements and Court Orders (as such terms are defined in the attached Glossary) would be enforced as written.
(n) The Client will not in the future take any discretionary action (including a decision not to act) permitted under the Transaction Documents that would result in a violation of law or constitute a breach or default under any Other Agreement or Court Order.
(o) The Client will obtain all permits and governmental approvals required in the future, and take all actions similarly required, relevant to subsequent consummation of the Transaction or performance of the Transaction Documents.
(p) All parties to the Transaction will act in accordance with, and will refrain from taking any action that is forbidden by, the terms and conditions of the Transaction Documents.
(q) The Security Documents have been or will be duly recorded and/or filed in all places necessary (if and to the extent necessary) to create the lien as provided therein.
(r) The description of the Collateral is accurate and is sufficient under Law (i) to provide notice to third parties of the liens and security interests provided by the Security Documents and (ii) to create an effective contractual obligation under Law.
3.2 Exclusions. None of the foregoing opinions include any implied opinion unless such implied opinion is both (i) essential to the legal conclusion reached by the express opinions set forth above and (ii) based upon prevailing norms and expectations among experienced lawyers in the State, reasonable in the circumstances. Moreover, unless explicitly addressed in this Opinion Letter, the foregoing opinions do not address any of the following legal issues, and we specifically express no opinion with respect thereto:
(b) Federal Reserve Board margin regulations;
(c) pension and employee benefit laws and regulations (e.g., ERISA);
(d) Federal and state antitrust and unfair competition laws and regulations;
(e) Federal and state laws and regulations concerning filing and notice requirements (e.g., Hart-Scott-Rodino and Exon-Florio), other than requirements applicable to charter-related documents such as a certificate of merger;
(f) compliance with fiduciary duty requirements;
(g) Local Law;
(h)
(ii) title to Collateral or the accuracy of its description;
(iii) the sufficiency of the description of the Collateral to provide notice to third parties of the lien or security interest provided for in the Security Documents; and
(iv) the creation, attachment, perfection, or priority of a lien on Real Property Collateral or a security interest in Personal Property Collateral, or enforcement of a security interest in Personal Property Collateral separately from enforcement of the lien on Real Property Collateral as contemplated by §9-501([4] or [d]) of the Uniform Commercial Code.
(j) Federal and state environmental laws and regulations;
(k) Federal and state land use and subdivision laws and regulations;
(l) Federal and state tax laws and regulations;
(m) Federal patent, copyright and trademark, state trademark, and other Federal and state intellectual property laws and regulations;
(n) Federal and state racketeering laws and regulations (e.g., RICO);
(o) Federal and state health and safety laws and regulations (e.g., OSHA);
(p) Federal and state labor laws and regulations;
(q) Federal and state laws, regulations and policies concerning (i) national and local emergency, (ii) possible judicial deference to acts of sovereign states, and (iii) criminal and civil forfeiture laws; and
(r) other Federal and state statutes of general application to the extent they provide for criminal prosecution (e.g., mail fraud and wire fraud statutes).
(b) all other Federal and state bankruptcy, insolvency, reorganization, receivership, moratorium, arrangement and assignment for the benefit of creditors laws that affect the rights and remedies of creditors generally (not just creditors of specific types of debtors);
(c) all other Federal bankruptcy, insolvency, reorganization, receivership, moratorium, arrangement, and assignment for the benefit of creditors laws that have reference to or affect generally only creditors of specific types of debtors and state laws of like character affecting generally only creditors of financial institutions and insurance companies;
(d) state fraudulent transfer and conveyance laws; and
(e) judicially developed doctrines relevant to any of the foregoing laws, such as substantive consolidation of entities.
(b) affording equitable defenses (e.g., waiver, laches and estoppel) against a party seeking enforcement;
(c) requiring good faith and fair dealing in the performance and enforcement of a contract by the party seeking its enforcement;
(d) requiring reasonableness in the performance and enforcement of an agreement by the party seeking enforcement of the contract;
(e) requiring consideration of the materiality of (i) the Client’s breach and (ii) the consequences of the breach to the party seeking enforcement;
(f) requiring consideration of the impracticability or impossibility of performance at the time of attempted enforcement; and
(g) affording defenses based upon the unconscionability of the enforcing party’s conduct after the parties have entered into the contract.
(b) provide that forum selection clauses in contracts are not necessarily binding on the court(s) in the forum selected;
(c) limit the availability of a remedy under certain circumstances where another remedy has been elected;
(d) limit the right of a creditor to use force or cause a breach of the peace in enforcing rights;
(e) relate to the sale or disposition of collateral or the requirements of a commercially reasonable sale, including, without limitation, statutory cure provisions and rights of reinstatement [and limitations on deficiency judgments];
(f) limit the enforceability of provisions releasing, exculpating or exempting a party from, or requiring indemnification of a party for, liability for its own action or inaction, to the extent the action or inaction involves gross negligence, recklessness, willful misconduct or unlawful conduct;
(g) may, where less than all of a contract may be unenforceable, limit the enforceability of the balance of the contract to circumstances in which the unenforceable portion is not an essential part of the agreed exchange;
(h) govern and afford judicial discretion regarding the determination of damages and entitlement to attorneys’ fees and other costs;
(i) may, in the absence of a waiver or consent, discharge a guarantor to the extent that (i) action by a creditor impairs the value of collateral securing guaranteed debt to the detriment of the guarantor, or (ii) guaranteed debt is materially modified;
(j) may permit a party who has materially failed to render or offer performance required by the contract to cure that failure unless (i) permitting a cure would unreasonably hinder the aggrieved party from making substitute arrangements for performance, or (ii) it was important in the circumstances to the aggrieved party that performance occur by the date stated in the contract;
(k) limit or affect the enforceability of a waiver of a right of redemption;
(l) impose limitations on attorneys’ or trustees’ fees;
(m) limit or affect the enforceability of any provision that purports to prevent any party from becoming a mortgagee in possession, notwithstanding any enforcement actions taken under the Security Documents; and
(n) limit or affect the enforceability of provisions for late charges, prepayment charges or yield maintenance charges, acceleration of future amounts due (other than principal) without appropriate discount to present value, liquidated damages and "penalties."
3.7 Choice of Law. The opinion set forth in Paragraph [2.4] of this Opinion Letter is given as if the Law of the Opining Jurisdiction governs each Transaction Document, without regard to whether the Transaction Document so provides, and without regard to any choice of law rules except as provided below in this Paragraph. While the preceding sentence excludes any opinion on the effectiveness of any governing law provision in the Transaction Documents, if a Transaction Document contains a governing law provision choosing the Law of the Opining Jurisdiction to govern the contract, the opinion set forth in Paragraph [2.4] of this Opinion Letter includes an opinion (subject to the other qualifications in this Part III) that such governing law provision choosing the Law of the Opining Jurisdiction will be given effect under the choice of law rules of the Opining Jurisdiction; however, the opinion set forth in Paragraph [2.4] of this Opinion Letter does not include an opinion as to what Law governs (i) if the Transaction Document contains a governing law provision choosing the Law of an Other Jurisdiction (as defined in the attached Glossary) or does not contain a governing law provision, or (ii) to the extent the opinion as to what Law governs requires a determination that the Law of the Opining Jurisdiction is not contrary to a fundamental policy of the Law of an Other Jurisdiction.
IV.
ADDITIONAL CONFIRMATIONS
4.1 Legal Proceedings. We hereby confirm to Lender, pursuant to the request set forth in Section [___] of the Agreement, but without investigation, analysis, or review of court or other public records or our files, other than our litigation docket and information provided to us by the Client, that there are no actions or proceedings against the Client, pending or overtly threatened in writing, before any court, governmental agency or arbitrator which (i) seek to affect the enforceability of the Agreement, or (ii) except as disclosed in [the Agreement or an exhibit, annex or schedule thereto] [an officer’s certificate], come within [the objective standard established in the Agreement for disclosure of such matters] [other objective threshold].
V.
USE OF THIS OPINION
5.1 The opinions expressed in this Opinion Letter are solely for Lender’s use in connection with the Transaction for the purposes contemplated by the Transaction Documents. Without our prior written consent, this Opinion Letter may not be used or relied upon by Lender for any other purpose whatsoever, except for the use of this Opinion Letter (i) in connection with review of the Transaction by a regulatory agency having supervisory authority over Lender for the purpose of confirming the existence of this Opinion Letter, (ii) in connection with the assertion of a defense as to which this Opinion Letter is relevant and necessary, or (iii) in response to a court order.
Very truly yours,
GLOSSARY
As used in the Opinion Letter to which this Glossary is attached, except as otherwise defined in such Opinion Letter, the following terms (whether used in the singular or the plural) shall have the meanings indicated:
Actual Knowledge: with respect to the Opinion Giver, the conscious awareness of facts or other information by the Primary Lawyer or Primary Lawyer Group.
Client: the party or parties to the Transaction (including predecessor entities where relevant) for which the Opinion Giver provides legal representation.
Collateral: collectively or individually, all Real Property described in the Security Documents and all Personal Property described in the Security Documents, in respect of which provision is made by the Security Documents for a lien or security interest, unless a different meaning is given in the Transaction Documents.
Constituent Documents: the articles or certificate of incorporation, by-laws, partnership documentation or similar organization documents of the Client.
Court Orders: court and administrative orders, writs, judgments and decrees that name the Client and are specifically directed to it or its property.
Law: the statutes, the judicial and administrative decisions, and the rules and regulations of the governmental agencies of the Opining Jurisdiction, including its Local Law (but subject to any limitations on coverage of Local Law set forth in the Opinion Letter to which this Glossary is attached).
Local Law: the statutes and ordinances, the administrative decisions, and the rules and regulations of counties, towns, municipalities and special political subdivisions (whether created or enabled through legislative action at the Federal, state or regional level -- e.g., water agencies, joint power districts, the Maine Turnpike Authority, The Southern California Rapid Transit District, the Port Authority of New York and New Jersey), and judicial decisions to the extent that they deal with any of the foregoing.
Opining Jurisdiction: a jurisdiction whose applicable Law is addressed by the Opinion Giver in the Opinion; if there is more than one such jurisdiction (e.g., the United States and a particular state), the term refers collectively to all.
Opinion: a legal opinion that [includes a declaration that it is governed by the Accord and] is rendered by the Opinion Giver to one or more persons involved in the Transaction other than the Client.
Opinion Giver: the lawyer or legal organization rendering the Opinion.
Opinion Letter: the document setting forth the Opinion that is delivered to and accepted by the Opinion Recipient.
Opinion Recipient: the addressee or addressees of the Opinion Letter.
Other Agreements: contracts, other than the Transaction Documents, to which the Client is a party or by which it or its property is bound.
Other Counsel: a lawyer or legal organization (other than the Opinion Giver) providing a legal opinion pertaining to particular matters concerning the Client, the Transaction Documents or the Transaction (i) directly to the Opinion Recipient, or (ii) to the Opinion Giver in support of the Opinion.
Other Jurisdiction: the jurisdiction whose law a Transaction Document provides will govern that contract, if not the Opining Jurisdiction.
Personal Property: property or rights and interests in property treated under Law as personalty or otherwise not as Real Property.
Primary Lawyer:
(b) any lawyer in the Opinion Giver’s organization who has active involvement in negotiating the Transaction, preparing the Transaction Documents or preparing the Opinion Letter; and
(c) solely as to information relevant to a particular opinion issue or confirmation regarding a particular factual matter (e.g., pending or threatened legal proceedings), any lawyer in the Opinion Giver’s organization who is primarily responsible for providing the response concerning that particular opinion issue or confirmation.
Public Authority Documents: certificates issued by the Secretary of State or any other government official, office or agency concerning a person’s property or status, such as certificates of corporate or partnership good standing, certificates concerning tax status, certificates concerning Uniform Commercial Code filings or certificates concerning title registration or ownership.
Real Property: property or rights and interests in property treated under Law as real property, including fixtures.
[Security Documents: mortgages, deeds of trust, security agreements, assignments of leases, rents or both (regardless of whether stated as absolute or as a security assignment), or similar instruments which provide for the creation of a lien on or security interest in Collateral to secure the obligations of the Client under the Transaction Documents.]
[Transaction: the business exchange (e.g., loan, sale of securities, merger or acquisition) by the Client and the other parties.]
[Transaction Documents: the contract documents setting forth
the principal terms of the Transaction addressed by the Opinion, including
the Security Documents, and other contracts ancillary thereto that are
explicitly addressed by the Opinion. Unless otherwise included by express
statement in an Opinion Letter, contracts of persons other than the Client
(such as guaranties and letters of credit) are not included in the term
Transaction Documents.]
Adapted by permission from Third-Party Legal Opinion Report
prepared by the Committee on Legal Opinions, Section of Business Law, ©
1991 American Bar Association. Copies of the Report may be purchased
from Order Fulfillment, ABA, 750 North Lake Shore Drive, Chicago, IL 60611.
$10 each for up to 10 copies; $7.50 for 11 to 24 copies; $5 for 25 plus
copies, $3.95 for postage and handling for each order.