The warranty clause that is worth arguing over

Sellers push back hardest on the warranties covering accounts and material contracts, and that is usually the wrong place for a buyer to give ground. An accounts warranty that the accounts show a true and fair view, given as at completion rather than as at the last balance sheet date, is doing real work if anything has changed in the interim.

We spend less time than most on indemnities for known problems, which are really a pricing mechanism dressed up as a legal protection, and more time on the disclosure letter, because a warranty qualified by fair disclosure is only as strong as what actually got disclosed. A general disclosure of the data room is not fair disclosure of anything specific, and we say so in every negotiation where a seller's solicitor tries it.