Seller’s Representations and Warranties in M&A: Three Things to Avoid

Mergers and acquisitions
Linkedin Post

1. Representations and warranties about the future.

The 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.

Example: The Company has not supplied services which are, or were, or will become, in any material respect, faulty or defective.

2. Representation and warranties about things not within the seller’s control.

Example: No other party to any contract to which the Company is a party is unlikely or unwilling or unable to fulfil its contractual obligations.

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.

Example: The statutory books and books of account and other records of whatsoever kind of the Company are up-to-date and maintained in accordance with all applicable legal requirements.



This post was first posted on Linkedin on 19 November 2020.

Linkedin Post
Five key steps for legal due diligence

Most lawyers are good at identifying issues, but legal due diligence shouldn’t be limited to merely reviewing documents and identifying issues. Here are my five steps for conducting legal due diligence: 1. Identify the issues based on the scope of legal due diligence as agreed with the clients. 2. Provide recommendations …

Linkedin Post
Begin with the end in mind: Post-completion integration

I once worked on an M&A deal that took more than a year to complete. While the deal was not inherently complex, it dragged on due to delays in finalizing the details of the transaction agreements for reason beyond my control. As the deal involved a larger corporation acquiring a …

Being a Corporate Lawyer: Why I Do What I Do

After years of demanding schedule and juggling simultaneous corporate exercises which take a toll on physical and mental health, it is not surprising that some corporate lawyers experience burnout. Unlike some legal practice areas, the work of a corporate lawyer may not seem immediately impactful or “make a difference” to …