Repetition of warranties

Repetition of warranties means the seller is treated as giving the warranties twice: once at signing and again at completion. If something becomes untrue between those two dates, the seller is on the hook even though it was true when they signed.

The buyer wants repetition because it shifts the risk of any deterioration between signing and completion onto the seller. The seller wants either no repetition or a tightly controlled version of it, because by signing they have agreed a price based on the business as it then stands and do not want to underwrite events outside their control in the gap that follows.

Where repetition is unavoidable, the levers are: a bring-down right that lets the seller update the disclosure letter against changes between signing and completion, a Material Adverse Effect threshold giving the buyer a right to terminate (not a claim) if a defined event occurs, and carve-outs for matters arising from general market or industry conditions rather than the business itself.

What you as a seller should push back on: repetition without a corresponding right to update the disclosure letter against interim events, repetition of warranties about matters outside your control between signing and completion (third-party action, general market movement, changes in law), and Material Adverse Effect definitions broad enough to be triggered by ordinary commercial variability.

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