Company acquisitions: representations warranties and disclosure
By ROSS MCNAUGHTON & MATTHEW POXON
In any business or company acquisition, the principle of caveat emptor (buyer beware) applies. A buyer can receive contractual assurances from the seller as to the assets and liabilities of the business or company, which give a certain level of comfort and recourse to a buyer in the event that those assurances turn out to be untrue, incomplete or misleading. These assurances generally take the form of representations and/or warranties, and are discussed here.