Definition

Reps & Warranties

Seller statements of fact about the business that, if false, give the buyer a contractual claim.

The reps cover everything the buyer is relying on: title to shares, IP ownership, no undisclosed litigation, financial statements true and fair, compliance with law. Breach of a rep gives rise to an indemnity claim, normally capped by an escrow or insurance policy. Diligence findings flow into the disclosure schedule — anything disclosed there is carved out of the rep.