Representations and warranties are a major part of any business acquisition. In certain purchase agreements, the representations and warranties may be broken into categories such as “Fundamental Representations and Warranties” and perhaps “Non-Fundamental Representations and Warranties.” That being said, which representations and warranties are generally included in “Fundamental Representations and Warranties?” Of course, the specific answer depends upon the specific agreement and facts and circumstances of the transaction but generally you can expect a handful of the same reps & warranties to be included in “Fundamental Representations and Warranties.” In terms of why one would care as to what constitutes a fundamental representation and warranty, generally different survival periods for indemnification and indemnification caps will apply to fundamental representations and warranties.
If you have questions regarding fundamental representations and warranties, get in touch for a free consultation with a business attorney at the McGuire Law Firm.