Introduction -

In merger and acquisition (M&A) transactions, the definitive purchase agreement typically contains representations and warranties made by the seller with respect to the target company. The scope and detail of these representations and warranties are often heavily negotiated and tailored to reflect both the nature of the target and its business, financial condition and operations, but also the relative negotiating strength of the buyer and seller. Representations and warranties not only provide information to the buyer, but also allocate risk as between buyer and seller with respect to the covered matters.

Originally published in Bloomberg Law.