Inside Representation And Warranty Insurance

Law360, New York (April 13, 2011, 1:53 PM EDT) -- Allocation of risk in proposed acquisition transactions is traditionally one of the most difficult issues that needs to be resolved before a meeting of the minds can be achieved. Buyers desire maximum protection and sellers or the target seek minimal post-closing exposure. This tension most often arises in the context of the negotiation of the limits of the sellers’ liability for breaches of representations and warranties.

Although there are numerous variables at play in a given transaction, including the relative bargaining power of the parties, the...
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