Representations and Warranties
Contractual statements of fact made by a party in an M&A or financing agreement that must be true as of signing and closing.
Representations and warranties (R&W) are the factual backbone of any acquisition agreement. The seller represents facts about the business — financial statements are accurate, no undisclosed litigation, material contracts are in full force — and warrants that those facts are true. If a rep turns out to be false, the buyer has a breach of contract claim and typically can seek indemnification.
In modern M&A, R&W insurance has become common for deals above $30M. The insurer underwrites the seller's representations, providing the buyer with an insurance policy rather than direct seller indemnification. This structure allows sellers to distribute deal proceeds at closing without holding escrow.
For document intelligence workflows, R&W extraction is a critical due diligence task. Every representation must be verified against the supporting documentation in the data room — matching financial statement reps to audited financials, litigation reps to legal hold notices, and IP reps to assignment records.
More legal Terms
Non-Disclosure Agreement (NDA)
A legally binding contract that establishes confidentiality obligations between parties sharing sensitive information.
Service Level Agreement (SLA)
A contract defining the expected performance standards, uptime guarantees, and remedies for a service provider.
Indemnification
A contractual obligation where one party agrees to compensate the other for specified losses or damages.
Force Majeure
A contract clause that frees parties from obligations when extraordinary events beyond their control prevent performance.
Arbitration
A private dispute resolution process where an independent arbitrator makes a binding decision instead of a court.
Contract
A legally enforceable agreement between two or more parties that creates mutual obligations.
Analyze Documents Related to Representations and Warranties
Upload any document and get AI-powered analysis with verifiable citations.
Start Free