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Home Resources Glossary Representations and Warranties / Reps & warranties

M&A Glossary

Representations and Warranties / Reps & warranties

Statements and guarantees by a seller of a business relating to the assets, liabilities, and contacts of the business sold.

See Also

Purchase agreement.

Tips

Representations are statements of fact by the seller regarding the condition of the business, covering virtually all aspects of the company. Warranties are the seller’s assurances to the buyer that the representations are true, and that if they are not, the buyer will be entitled to seek legal remedies. The breach of representations and warranties may result in damages payable by the breaching party.

Related Resources

M&A Reps & Warranties | A Complete Guide

Related M&A Terms

Recurring Revenue

Revenue that is predictable, stable, and often subscription-based, and can be counted on in the future with a high degree of certainty. See Also Repeat customer. Example Examples of recurring...

Repeat Customer

Customers who are not contractually committed to a business, but who still frequent it. See Also Recurring revenue. Example Examples of repeat customers include customers for restaurants or other retail...

Return on Investment (ROI)

The return on an investment calculated as a percentage of the original investment. See Also Cash-on-cash return, internal rate of return. Example If the investment is $1 million and the...

Right of First Offer

A contractual obligation by the owner of an asset to negotiate the sale of an asset with the rights holder before offering the asset for sale to third parties. See...

Right of First Refusal

A contractual stipulation in which a party has the right to match an offer from a third party. See Also Right of first offer. Tips A right of first refusal...

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