Discover Valuable Insights and Expert Advice

In the course of negotiating a purchase and sale agreement during the M&A process, business people may rightly wonder which provisions actually matter. The section of the agreement dealing with the purchase price is the most interesting section for both buyers and sellers, but the lawyers may spend hours negotiating indemnities, caps, baskets, definitions, MAE clauses, covenants, and other arcane provisions. Which of these provisions are actually likely to result in litigation? Let’s briefly discuss the provisions that are unlikely to result in disputes or litigation: First, indemnities are not typically litigated. Indemnities can be important, and in certain circumstances may provide a buyer (much less frequently, a seller) some protection post-closing, but although lawyers love to fight over indemnities, they are actually aren’t typically invoked post closing.