Representations and warranties | Canada | Global Private M&A Guide - Limited External Content

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 common, and different materiality thresholds may be used for different representations. Materiality is not typically quantified by an amount.

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

Frequency/market practice: Knowledge is commonly qualified as constructive knowledge (imposing obligations to conduct an express investigation, reasonable or due inquiry). Specific individuals are usually identified.

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

Frequency/market practice: Full disclosure representations (no untrue statements and no omissions) and/or US-style "10b-5" representations are not included in the majority of transactions but are not uncommon.

Is disclosure of the data room common?

Frequency/market practice: Rarely.

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