Frequency/market practice: The cap is often split between title, tax and other fundamental warranties (which almost always have a cap of 100% of the purchase price) and other more general, business/operations warranties (which typically have a lower percentage cap, usually between 30% and 50% of the purchase price). Larger deals tend to have a lower aggregate cap.
Frequency/market practice: Both are seen regularly; will be subject to deal negotiation (seller will seek to expand the scope of the cap to all claims under the agreement, whereas buyer will seek to limit it to warranty claims only).
Frequency/market practice: Fundamental warranties are often exempted from the lower cap, but still subject to a 100% cap (e.g., title, capitalization, authority and tax).
There is usually a carve-out from all limitations (including cap) for fraud, tax evasion and deliberate nondisclosure.
Frequency/market practice: Basket is very common, but both are seen.
Frequency/market practice: It is common to have:
- 18-24 months for general warranties;
- Anywhere from 18-24 months to 6-12 years for title, capitalization and authority warranties (the seller will typically start with the same time period as general warranties but buyer will often seek the relevant statutory limitation period (i.e. 6-12 years)
- Five years (or seven years, where there is good justification for doing so) for tax warranties and tax indemnities.
Frequency/market practice: Fundamental warranties are often exempted from the lower cap, but still subject to a 100% cap (e.g., title, capitalization, authority and tax).
There is usually a carve-out from all limitations (including cap) for fraud, tax evasion and deliberate nondisclosure.