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Allocating Risk is a Small Business Sale: Reps & Warranties

Clients in their first business transaction are surprised and even frustrated that lawyers devote so much time and attention to “Representations & Warranties” when they negotiate a purchase & sale agreement (a “PSA”). This part of the PSA isn't just wasted words. It's often the most important part.

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Reps and Warranties are only one aspect of negotiating a business acquisition , and executing a good deal. There are many resources in bookstores and on the net for the process, and if you're engaged a broker to represent you in the acquisition, they should be another invaluable resource (although, they usually don't get paid if a deal doesn't go through, so they're naturally motivated towards compromise)

One good simple article on the larger sales process (from the Seller's perspective) is an article in Inc:

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