Written by attorney Robert J. Drumm

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.

Additional resources provided by the author

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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