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Indemnification Claims: Sellers, Don’t Get Caught Holding the Hot Potato

October 17, 2023 (2 min read)

Indemnification provisions and representations and warranties in private target acquisition agreements are often highly negotiated because post-closing transaction risks are allocated by these provisions. When the music stops and the deal is signed, each party bears its own risks subject to the negotiated limitations on indemnification. A seller can minimize its indemnification obligations by adding materiality and knowledge qualifiers to, and narrowing the scope of, its reps and warranties, shortening the survival period, and adding a basket and cap to indemnity claims. Explore Practical Guidance content relating to indemnification claims in acquisitions.             

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  • Market Standards Acquisition Agreements
    Browse recent examples of publicly filed acquisition agreements in which indemnification is the exclusive remedy in Market Standards, Practical Guidance’s database of publicly filed M&A deals that enables users to search, compare, and analyze transactions using more than 150 M&A deal points to filter search results.
  • Indemnification Clause (Deductible)
    Refer to this mutual indemnification clause that provides for indemnification for breaches of reps and warranties, covenants, and other itemized occurrences, subject to a deductible.

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