What are Rep's & Warranties in the sale of a business?

In this episode, we discuss representations and warranties that are associated with the sale of a business. Rep's and warranties are included in the purchase and sale agreement between a seller and buyer. A representation is a statement of fact between parties, and a warranty is a promise between the parties that that statement is true. Rep's and warranties can be divided into two categories, fundamental and standard representations. It is essential for both the buyer and seller to understand the two, as they carry different levels of risk and financial implications. Knowledge qualifiers are included in representations. As a seller, you should understand the difference between the various knowledge qualifiers, as it can affect your liability concerning the indemnification portion of the purchase and sale agreement.    • How Much Is My Business Worth?  SDE vs EBI...      • Business Valuations Reports - Which one do...