Dominik Kaszuba | In Principle

When a party to a transaction was labouring under a mistake about the substance of the transaction, the party may be able to avoid the legal consequences of its stated intent to enter into the transaction. But what if the mistake arose in the preliminary stage leading up to the transaction, for example during the negotiations?

Convertible loans are still a relatively rare debt financing instrument in Polish practice, but have recently gained popularity among startups and in venture capital. In essence, a convertible loan involves granting a loan that may be repaid by converting the debt into equity in the borrower. But depending on the expectations, circumstances and identified risks, the loan provisions can differ widely, with flexibility to modify the positions of the parties. This means it is worth paying attention to a number of financial and legal parameters, including obvious ones that can affect the feasibility of the undertaking.