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OnDemand Course

Buyer's Representations and Warranties in a Business Sale

Gain an understanding on the representations and warranties typically required in a business sale and how to negotiate them.

In this market, buyers are eager to find appropriate businesses to acquire. Most buyers and their advisors focus on finding a business for sale, kicking the tires a bit, and setting a purchase price, and then assume they are ready to close the deal, but they may have overlooked a major part of buying a business: reaching an agreement with the seller on representations and warranties. This topic will help buyers and their advisors know what to expect in the way of representations and warranties that a seller should be required to make in a purchase agreement. Review the representations and warranties that buyers should be willing to make to sellers, but more importantly what representations and warranties buyers should require sellers to make. Learn what representations and warranties are typical, which ones are currently the focus in many transactions, and which representations and warranties can be dangerous to buyers if not properly structured. Learn when to buy a business as is, how to negotiate reasonable representations and warranties, how to control potential liability related to breach of representations and warranties, and when to negotiate insurance coverage for that potential liability. The material will also cover companion clauses that relate to representations and warranties and explain how those clauses can limit or expand a buyer's ability to hold a seller responsible for problems. Learn what steps to take prior to the purchase to facilitate the negotiation and closing process.

95 minutes
Course Exam
Certificate of Completion
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Agenda

Representations and Warranties Typically Required

  • The Function of Representations and Warranties in Purchase Agreements
  • Subjects Typically Covered by Representations and Warranties in Purchase Agreements
  • What Representations and Warranties Sellers Usually Offer, and Those Buyers Should Seek From Sellers?
  • Representations and Warranties That Most Often Lead to Liability or Claims

Negotiation of Representations and Warranties

  • Relative Importance of Buyer's and Seller's Representations and Warranties: Focus on Those of the Seller
  • When to Buy a Business As Is
  • The Central Role of Knowledge and How to Define It
  • Covering the Appropriate Time Period Before Sale
  • Insurance Coverage for Related Liabilities, as a Term of the Sale Transaction
  • Setting the Stage for Negotiation: Addressing Representations and Warranties in the Letter of Intent

Companion Clauses That Define a Seller's Liability for Representations and Warranties

  • Indemnification
  • Survival Periods and Fundamental Representations and Warranties
  • Sandbagging: What You Know Can Hurt You
  • Disclosure Schedules: Making Sure You Are Getting the Business You Expect

Making the Purchase Easy: Steps Buyers Can Take to Support Reasonable Representations and Warranties

  • Due Diligence: Aligning the Process With Representations and Warranties
  • Recognizing the Risk of Successor Liability
  • Focusing on Risks Most Likely to Transfer to Buyers
  • Working With Experienced Investment Bankers, Accountants, and Counsel
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Credits

OnDemand Course

Applications have not yet been submitted for Delaware, Idaho, Kentucky, Maine, Ohio, Oklahoma, South Carolina, and Wyoming CLE for this course. However, if you are interested in obtaining CLE for any of the listed states or have any additional credit questions please email us at [email protected] or call us at 866-352-9540.

This course was last revised on August 25, 2020.

Call 1-866-352-9540 for further credit information.

  • AR CLE 1.5
     
  • This course has been approved for 1.5 hours of CLE by the Arkansas CLE Board.
     
  • CA MCLE 1.5
     
  • Lorman Business Center, LLC. is a State Bar of California approved MCLE sponsor and this course qualifies for 1.5 CLE hours of participatory credit.
     
  • NY CLE 1.5 including Areas of Professional Practice 1.5
     
  • This course has been approved in accordance with the requirements of the New York Continuing Legal Education Board for up to a maximum of 1.5 credit hours in the area(s) of Areas of Professional Practice for 1.50 hours. Each hour may be counted only as satisfying one category of credit. Duplicate credit for the same hour of instruction is not permitted. This course qualifies for both established and newly admitted attorneys. Lorman Business Center, LLC. has a financial hardship guideline. Please contact customer service at 1.866.352.9539 for instructions on how to apply.
     
  • WA CLE 1.5
     
  • This program has been approved by the Washington State Board of Continuing Legal Education for 1.5 hours of A/V credit under the Law & Legal Procedure category.
     
The CLE Code is ONLY a requirement when applying for CLE Credit in New York. Other states do not need to supply the CLE Code to apply for CLE credit.

To earn each credit Lorman offers through the OnDemand learning platform, you need to watch 100% of the program. Also, for certain credits you will need to fulfill additional requirements which will be displayed on the "credits" tab when viewing the course.

This program does NOT qualify, nor meet the National Standard for NASBA accreditation.

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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

Faculty

Duncan Butcher

Duncan Butcher

Miller Nash LLP

  • Partner at Miller Nash Graham & Dunn LLP, in Seattle, Washington
  • Focuses his practice on corporate transactions, including the purchase and sale of businesses
  • Represented both buyers and sellers in M&A transactions involving a range of industries, including SaaS, cleantech, computer software, energy, food services, financial services, professional services, construction, and automotive repair
  • J.D. degree, Seattle University School of Law; B.A. degree, University of Washington
  • Can be contacted at 206-777-7422 or [email protected]
Erich W. Merrill, Jr.

Erich W. Merrill, Jr.

Miller Nash Graham & Dunn LLP

  • Partner at Miller Nash Graham & Dunn LLP, in Portland, Oregon, with over 35 years of experience in representing clients in business transactions, including mergers and acquisitions for privately held businesses
  • Handled business sales and purchases for clients in a variety of industries, including logistics, medical devices, biotechnology, computer software, beverages, clean-room technologies, sports apparel, brokerage, financial services, wood products, metal fabrication, transportation, and specialty gases
  • Speaks frequently on topics related to selling and buying businesses
  • Recently presented seminars on Nonbinding Legal Documentation in Commercial Transactions, and Seller's Representations and Warranties in Business Transactions
  • Past president of the Business Law Section of the Oregon State Bar, served as leader of his firm's Corporate and M&A team, is listed in Best Lawyers of America, and is a Super Lawyer
  • J.D. degree, Harvard Law School
  • Can be contacted at 503-205-2504 or [email protected]
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Why Lorman?

Over 35 years and 1.4 million customers worth of experience providing continuing education. Our passion is providing you world-class training to help you succeed in business and as a professional.

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Product ID: 407280
Published 2020
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