This article provides a good explanation on the definition of representations and warranties at the end of the first section, and their use in protecting an asset or share purchaser. The article also describes the due diligence process, and describes the types of clauses that can be included for the protection of the buyer.
Specific exceptions to representations are generally contained in the schedules to the agreement. Vendors can use this drafting mechanism to ensure that their representations are accurate, thus increasing the likelihood that they will receive the full benefit of what they have bargained for. Purchasers need to pay close attention to the schedules to ensure that they are receiving what they expected to purchase, and to determine how to focus their due diligence efforts.
- Parties must pay close attention to the schedules to determine whether the details of the deal have been accurately recorded.
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