Frequency/market practice: The amount ranges from 10%-40% of the purchase price in relation to business warranty, depending on the size of the deal. Financial caps on key warranties (i.e., authority, title, capacity, etc.) as well as tax indemnities are generally limited to 100% of the purchase price or are unlimited in certain deals.
Frequency/market practice: They usually apply to warranties only, but in some cases, they are negotiated and are applied to other claims, such as tax indemnities, specific indemnities and other covenants.
Frequency/market practice: Key warranties are generally excepted (e.g., title, capacity, authority). Fraud and gross negligence are also excepted. Often specific areas of concern, such as tax, employment and environmental, have specific higher caps.
Frequency/market practice: The general negotiated survival period could be anywhere from 12-36 months post-closing in relation to business warranties. The survival periods for tax or key warranties is commonly up to the expiry of the applicable statute of limitation, although we have seen this negotiated to shorter periods in certain cases depending on the profile of the seller.
Frequency/market practice: It is common to carve out key warranties (e.g., title, capacity, authority ) as well as fraud and gross negligence or significantly expanding the key warranties survival period (e.g., up to the expiry of the applicable statute of limitation).