What is a Legal Opinion and why is it needed?

What is a Legal Opinion and why is it needed?

Before concluding any agreement, it is necessary to carefully study all its terms and legal requirements that such an agreement must comply with. In banking and finance matters, a legal opinion is an instrument that provides a qualified analysis of information on the subject and other issues related to the conclusion of the agreement. In this article, we will look in detail at the situations when a legal opinion is required and what it should be like.

What is a legal opinion?

A legal opinion (or opinion letter) is an objective interpretation or analysis of a legal position by a court, judicial officer, or legal expert. Since often there are situations that require clear solutions to specific issues, a legal opinion has become an indispensable solution in these cases. Being provided with an exact legal study of the legal threats of a particular project or agreement, a recipient will rely on this document as a basis for entering into a deal.

Legal opinions have become a common practice for dealing with international transactions — they are a precondition for financing. The purpose of this statement is to bind transaction parties and force them to keep to a specific agreement.

In most cases, these legal statements are requested for a kind of transaction involving any commercial deals, for example, intellectual property matters, loan and/or security transactions, buying the property or businesses, banking or cryptocurrency transactions and much more since the legal opinion can be drafted on various situations and client issues.

What is the value of a legal opinion?

Predominantly, this statement has three main purposes:

Informing the client about the legal force of the agreement or issue. In foreign jurisdictions, legal practitioners may issue an opinion on whether the provided documents comply with the local law, i.e. local registration.

Analyzing legal risks that should be investigated and addressed. For the client, this is the insurance of legal services provided. Thus, having a legal opinion, a recipient can file a lawsuit for the provision of legal services of inadequate quality, if the losses were nevertheless caused to them and determine whether any other types of protection (i.e. indemnities) are needed.

The most important purpose of this statement is to confirm the ability of the recipient to fulfill their obligations in accordance with the documents.

The structure of a legal opinion

There are no clear requirements for the structure of this document. But there is a general practice that most lawyers adhere to. In general, a legal opinion consists of the following parts:

  • Background — this part includes information about the client, matter, and who the legal opinion is addressed to, as well as details of the studies and documents.
  • Assumptions — it reveals the study of the documents submitted by the client and the result of their study, as well as the investigation of legislation and judicial practice in a specific situation.
  • Opinion — this is the main section of a document, that contains the results of the study such as provisions of current legislation concerning the deal, answers for the questions, lists of potential risks, and recommendations.


A legal opinion will provide an applicant with reliable information on all the legal aspects of the deal. It allows to clearly define legal rights. Moreover, it will help to avoid costly litigation or make the right decision in the current litigation. A legal opinion is an important part of any transactions with foreign counterparties.

If you want to get a legal opinion, the specialists of Eternity Law International are ready to provide you with appropriate assistance.

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