Automotive Buy Sell Report: "Why you should care about Representations and Warranties"
In an article published in Automotive Buy Sell Report, George Taylor discusses seller's representations and warranties. This covers facts that fall under seller's knowledge, which the buyer is relying on when deciding to make the purchase. A plethora of businesses in all industries use the seller's knowledge terminology in asset purchase agreements. The idea from the seller's perspective is to take as many representations as possible and provide limitations to them based on the seller's knowledge. If the representation is false but the seller did not have knowledge of the falsehood, there is no liability for breach. Although not resolving the seller's knowledge issue, Taylor details, "Sellers who can persuade buyers of the fairness of knowledge qualifiers have done a good day's work by making it difficult for a buyer to recover for breach. Buyers who stick to their guns and require the seller to guarantee the truth of representations irrespective of the seller's knowledge have managed to obtain for themselves the benefit of the bargain that they likely priced into the deal at the outset."
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