M&A: Three representations and warranties sellers should avoid

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1. Representations and warranties about the future

A seller should avoid providing representations and warranties in respect of future events due to uncertainty about the future. Further, after the seller disposes of the seller’s shares, the seller may no longer be in control of the target company and hence, not in a position to ensure the representations and warranties continue to be true.

2. Representation and warranties on matters which are not within the seller’s control.

3. Widely drafted representations and warranties

Without definitive parameters, the seller may be caught off guard by breach of representations and warranties which the seller has not contemplated.

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This post was first posted on Linkedin on 4 May 2023.

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