Corporate Practice Series Portfolio No. 82-1, Third-Party Legal Opinions, discusses legal opinions in letter form that are addressed to someone other than the lawyer's client. The receipt of such an opinion letter, in a previously agreed upon form, by a third party, is frequently a condition of closing a commercial transaction of a magnitude justifying the expense. The portfolio discusses the custom and practice for giving and receiving such opinions in negotiated commercial transactions. The purposes and typical structure of the opinion letter are explained, as are some of the standard paragraphs that appear in such opinion letters.

Portfolio 82-1st: Third-Party Legal Opinions

I. Introduction and Glossary

II. The Purposes of the Opinion Letter

III. Ethical Considerations and the Duties to the Non-Client Addressee and the Client

IV. Misleading Opinions

V. In-House Counsel Opinions

VI. The Structure of Third-Party Opinion Letters
    . Introductory Material
    A. Date, Address, and Signature
         1. Date
         2. Address
         3. Signature
    B. The Paragraphs Preceding the Opinions
    C. The Opinion Paragraph(s) That Confirm Facts
    D. The Concluding Paragraphs: Limiting the Law to Named Jurisdictions and Reliance to Specified Persons or Groups
    E. Special Relationships with the Client: To Be or Not to Be Disclosed?

VII. The Supplemental Opinion (or Opinion in Lieu) of Other Counsel

VIII. Determining the Facts and the Law
    A. Gathering the Facts
    B. When Suspicion Renders Reliance Unreasonable
    C. The Use, Abuse, and Misuse of Assumptions of Fact
    D. The Law of the Letter

IX. The Remedies Opinion and Its Exceptions
    A. The Remedies Opinion
         1. Scope
         2. The standard exceptions: bankruptcy and equitable principles
              a. The bankruptcy exception
              b. The equitable principles limitation
         3. A sampler of sometimes perplexing provisions: will special treatment be necessary?
              a. The choice-of-law clause
              b. The forum selection clause
              c. The arbitration clause
              d. ‘Best efforts'
    B. The Practical Realization Exception
    C. When the Chosen Law of the Transaction and the Practice Limitation of the Opinion Diverge

X. The Status Opinions: Due Incorporation and Organization, Valid Existence, and Good Standing

XI. Due Authorization, Execution, and Delivery

XII. No Breach, Default, or Violation: ‘No Conflicts'

XIII. The Stock Answer to Share Status

XIV. Confirming the Absence of Litigation

XV. ‘No Violation of Law'—A Sheep in Wolf's Clothing

Portfolio 82-1st: Third-Party Legal Opinions

Wks. 1 Illustrative Opinion Letter Loan Agreement—Outside Counsel

Wks. 2 Illustrative Opinion Letter Loan Agreement—Inside Counsel

Wks. 3 Illustrative Opinion Letter Stock Purchase Agreement—Outside Counsel

Wks. 4 Illustrative Opinion Letter Stock Purchase Agreement—Inside Counsel

Wks. 5 ABA Guidelines for the Preparation of Closing Opinions

Wks. 6 Model Rules of Professional Conduct, Rule 1.6, Confidentiality of Information (2004) *

Wks. 7 Model Rules of Professional Conduct, Rule 2.3, Evaluation for Use by Third Persons *

Wks. 8 Model Rules of Professional Conduct, Rule 4.1, Truthfulness in Statements to Others *

Wks. 9 Restatement of the Law, Third, The Law Governing Lawyers Chapter 4, Lawyer Civil Liability, §51 Duty of Care to Certain Nonclients *

Wks. 10 Restatement of the Law, Third, The Law Governing Lawyers Chapter 4, Lawyer Civil Liability, §52 The Standard of Care *

Wks. 11 Restatement of the Law, Third, The Law Governing Lawyers Chapter 6, Representing Clients—In General, §95 An Evaluation Undertaken for a Third Person *

Wks. 12 [Reserved]

Wks. 13 Dean Foods Company et al. v. Arthur J. Pappathanasi et al., 18 Mass. L. Rep. 598 (Dec. 3, 2004)

Carolan E. Berkley
Stradley Ronon Stevens, LLP
Philadelphia, Pennsylvania

Morton Moskin
New York, New York