Opinion: Overview, definition, and example
What is an opinion?
An opinion, in a legal or contractual context, refers to a formal statement or judgment provided by a qualified professional, such as a legal expert, auditor, or consultant. It is often used to assess compliance, validity, or risk in a given situation. Legal opinions, for example, are commonly issued by attorneys to confirm whether a contract or transaction aligns with applicable laws.
For example, before finalizing a business merger, a company might request a legal opinion from its attorneys to confirm that the deal complies with antitrust laws and does not create legal risks.
Why is an opinion important?
Opinions provide an authoritative assessment that helps businesses and individuals make informed decisions while minimizing legal, financial, or operational risks. They are commonly used in transactions, regulatory compliance, and financial reporting.
For businesses, seeking expert opinions ensures they are operating within legal and industry guidelines, reducing potential liabilities. Without a proper opinion, parties may enter agreements or make decisions without fully understanding the risks involved.
Understanding opinion through an example
Imagine a technology startup is preparing for an initial public offering (IPO). Before listing its shares, the company’s auditors provide an opinion on its financial statements, verifying that they accurately represent the company’s financial position. Investors rely on this opinion to assess the company's financial health.
In another case, a business is entering into a complex international contract. To ensure the agreement complies with the legal requirements of both countries involved, the company requests a legal opinion from a law firm. This document provides an expert assessment of the contract’s enforceability and potential legal risks.
An example of an opinion clause
Here’s how an opinion clause might appear in a contract:
"The Parties may, at their discretion, obtain a legal opinion from a qualified attorney confirming the enforceability of this Agreement under applicable laws. Such an opinion shall not be unreasonably withheld and shall be relied upon as a good faith interpretation of the contractual terms."
Conclusion
Opinions play a critical role in business, legal, and financial decision-making by offering expert assessments that reduce uncertainty and risk. Whether in legal matters, financial transactions, or regulatory compliance, obtaining a professional opinion ensures that parties have the necessary information to make sound decisions. Clearly defining the role and reliance on opinions in contracts helps avoid disputes and reinforces informed decision-making.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.