An anti-sandbagging clause is a provision in a share sale or asset sale agreement preventing the buyer from making a warranty claim for a matter they knew about (or should have known about) before completion. Anti-sandbagging clauses can be drafted at varying levels of stringency, from “actual knowledge of the deal team” through to “constructive knowledge based on materials made available in the data room.”
Anti-sandbagging is generally seller-favourable. The breadth of the knowledge standard adopted is consequential: a wide standard (“anyone in the buyer’s group with access to the data room”) favours the seller, while a narrow standard (“actual knowledge of named deal team members”) favours the buyer.