Key Points:
Disclosure/information warranties and qualification of
warranties need to be specific and clear.
So you are looking to sell the business that you've spent
the last 20 years building up from scratch. You've engaged a
financial adviser, signed up interested parties to a
confidentiality agreement and gone through the due diligence
process. You've received indicative offers, and selected a
preferred bidder. Next thing you know, you get an email from the
preferred bidder attaching a 100 page sale agreement. So what are
the most critical provisions to which you need to pay the most
attention?
The disclosure/information warranty
It is usual for a seller in a sale transaction to warrant the
quality of the due diligence materials provided to the buyer. Small
differences in the wording of this warranty can make an enormous
difference to the content of the seller's promise regarding the
quality of the due diligence materials and hence the allocation of
risk
