A legal opinion is a formal document in which a lawyer or law firm sets out its professional conclusions on specific questions of law, based on stated facts, documents and assumptions. Legal opinions guide clients' decisions and are frequently delivered to third parties in commercial transactions.
Typical Structure
A legal opinion usually identifies the addressee and the purpose; lists the documents examined; sets out assumptions (for example, the genuineness of signatures and the accuracy of facts supplied); states the opinions themselves, often as short numbered conclusions; and records qualifications and limitations, such as insolvency laws or the discretion of courts to grant equitable remedies.
Transaction Opinions
In financings, capital market offerings and cross-border acquisitions, counsel commonly give opinions on matters such as the due incorporation and capacity of a party, due authorisation and execution of documents, enforceability of obligations, absence of conflict with law, and the recognition of a choice of foreign law and submission to jurisdiction.
In Indonesian Practice
In Indonesian capital market transactions, a legal due diligence report and a legal opinion issued by a capital market legal consultant registered with the Financial Services Authority are required for public offerings. Legal opinions are also common in licensing, mergers and acquisitions and regulatory compliance reviews.
Responsibility
A legal opinion is a professional judgement, not a guarantee. Its author may, however, incur liability in negligence to the client and, in some circumstances, to third parties who were intended to rely on it. Precise drafting of assumptions and qualifications is therefore essential.