Representations and Warranties in Acquisition Agreements


Summary

Like the purchase price provisions, the representations and warranties sections are among the most heavily negotiated provisions of an acquisition agreement. As a technical matter, representations have been defined as statements of fact that generally relate to past or existing facts and warranties have been defined as promises that existing or future facts are or will be true. As a practical matter, in the U.S., practitioners do not generally distinguish between representations and warranties. In fact, the parties to an M&A acquisition agreement “represent and warrant” to a variety of past, present, and future statements without distinguishing between those that are representations and those that are warranties. This practice note will discuss the typical representations and warranties found in an acquisition agreement and considerations for drafting and negotiating these provisions.