Representations and warranties
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Representations and warranties Start Comparison
Materiality in representations — how is it quantified (e.g., by a USD amount)?

Frequency/market practice: Fairly common; materiality qualifiers are commonly seen but are often not quantified, so, for example, knowledge qualifiers are common (other than specific warranties, e.g., contract value).

How is knowledge qualified (e.g., specific people, actual/constructive knowledge)?

Frequency/market practice: Knowledge qualifiers are common, but only appropriate for certain warranties. Depending on the outcome of negotiations, they are often limited to the actual knowledge and reasonable due enquiry of a specified list of senior management.

Is a warranty that there is no materially misleading/omitted information common?

Frequency/market practice: Very common; this is almost always requested by buyers, but typically one of the most contested warranties in negotiations.

Is disclosure of the data room common?

Frequency/market practice: Very common; it is standard practice in Australia. It is fairly common for the buyer to seek to limit disclosure to matters fairly disclosed with sufficient particularity to enable the buyer to assess the impact of the disclosed matter on the target company/business.