Representations and Warranties
Contractual statements by the seller in a purchase agreement about the condition of the business — accuracy of financials, ownership of assets, absence of undisclosed liabilities, compliance with laws. Breaches discovered post-closing are the basis for holdback claims and indemnification demands.
Where This Matters
Related Terms
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Enterprise Value (EV)Seller's Discretionary Earnings (SDE)EBITDA MultipleQuality of Earnings (QoE)Add-BacksDue DiligenceLetter of Intent (LOI)Holdback (Escrow)Earn-OutAsset SaleStock Sale (Equity Sale)GoodwillPersonal GoodwillCommunity PropertySeparate PropertyPereira MethodVan Camp MethodTransmutationBuy-Sell AgreementShotgun Clause (Russian Roulette Clause)View all →