TRW & Co’s UK branch is based at Holborn Gate, 330 High Holborn, London, WC1V 7QH, England.

Put options are frequently used in corporate and commercial transactions governed by the law of England and Wales to create a contractual right for one party to require another to buy specified shares or assets at a predetermined or formula-based price. They are deployed in joint ventures, shareholder exits, financing arrangements and securitisations. Proper drafting is essential to ensure clarity on exercise mechanics, pricing, timing and enforceability.

Core drafting elements

• Definition and scope — identify precisely what can be put (class of shares, number/percentage, or specified assets) and any exclusions.
• Trigger and exercise period — set out when the put can be exercised (fixed window, rolling period, post-default, change of control), and whether notice must be served within strict timeframes.
• Exercise mechanics — procedure for notice, confirmation, timing for completion, conditions precedent and required approvals (board, third parties, regulatory).
• Pricing/valuation — specify a fixed price, formula, independent valuation mechanism or expert determination, and allocate the valuation risk and costs.
• Settlement method — provide for physical settlement (transfer of shares/assets) or cash settlement, and include currency and payment mechanics.
• Transfer restrictions and pre-emption — reconcile the put with existing share transfer provisions, articles of association and any pre-emption rights.
• Conditions and limitations — set limitations (cap/floor on price, minimum exercise amount) and carve outs (e.g., insolvency, material adverse change).
• Warranties, indemnities and completion obligations — clarify what warranties survive completion and remedies for breach.

Valuation and dispute resolution

Valuation is often the most contentious part. Common approaches include: (a) a pre-agreed formula tied to financial metrics, (b) independent expert valuation with a binding determination, or (c) market-based price (where liquid markets exist). If using an expert, define their appointment process, scope, applicable assumptions and whether their determination is final and binding. Consider expedited dispute resolution (arbitration or specialist court timetable) for time-sensitive exits.

Regulatory, tax and insolvency considerations

A put may interact with regulation (e.g. prospectus, market abuse, takeover rules, FCA permissions) and tax rules (stamp taxes, capital gains). In distressed situations, insolvency law can affect enforceability and completion; directors’ duties and preferences to other creditors should be considered. Parties should obtain separate regulatory and tax advice tailored to the transaction.

Practical checklist

1. Confirm precise subject matter and quantity to be put.
2. Fix clear exercise windows, notice periods and timelines for completion.
3. Choose and document an appropriate valuation method and costs allocation.
4. Coordinate with constitutional documents, transfer restrictions and any security interests.
5. Address regulatory filings, antitrust/foreign investment clearances and market rules where relevant.
6. Include fallback dispute resolution and interim relief provisions to manage timing risk.

Jurisdiction and sources

Where the agreement is governed by the law of England and Wales, relevant official sources include the Financial Conduct Authority (https://www.fca.org.uk), the Bank of England / Prudential Regulation Authority (https://www.bankofengland.co.uk), HM Revenue & Customs (https://www.gov.uk/government/organisations/hm-revenue-customs), legislation.gov.uk for statutory provisions (https://www.legislation.gov.uk), and Companies House (https://www.gov.uk/government/organisations/companies-house) for corporate filings.

General information only; not legal advice and not a substitute for advice on a particular matter.