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Home Resources M&A Glossary Misrepresentation

M&A Glossary

Misrepresentation

A fraudulent or negligent misstatement, or an incomplete statement of a material fact to induce a contract.

Tips

If a misrepresentation induces another party to enter into a contract, that party may have the legal right to rescind the contract or seek compensation for damages. A misstatement of an intention or opinion is generally not considered a misrepresentation.

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M&A Reps & Warranties | A Complete Guide

Related M&A Terms

Main Street

The segment of the business landscape made up of small “mom-and-pop” businesses such as restaurants, coffee shops, landscaping companies, auto and truck service centers, convenience stores, most franchises, and small...

Management Buy-In (MBI)

A method for buying a company whereby an external management team acquires a company, often with the financial assistance of a sponsor, such as a private equity group. See Also...

Management Buyout (MBO)

The acquisition of a company by its existing managers, typically a leveraged transaction, which often uses the assets or future cash flows of the company as collateral for financing the...

Market Value

The price at which a company or an asset can be sold. See Also Fair market value. Tips Market value generally refers to the likely selling price of a company...

Material Adverse Change (MAC)

A legal provision found in a letter of intent or purchase agreement that enables the acquirer to back out of the transaction if the seller suffers adverse events before the...

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