Fraud Carve-Outs in Acquisition Agreements

Summary

This practice note focuses on the interplay between certain provisions in an acquisition agreement and the effects of fraud carve-outs. Contractual disputes regarding allegations of fraud are often complex, time-consuming, and expensive to litigate. Parties may amicably negotiate an acquisition agreement without even considering whether fraud could surface as an issue before or after the closing. Some buyers and sellers still enter into acquisition agreements without defining fraud or a non-reliance provision that renders fraud carve-outs useless. To best serve your client's interests and avoid potentially complex, time-consuming, and costly disputes after an acquisition agreement is signed, you should consider defining fraud and negotiate where in the acquisition agreement to include fraud carve-outs.