Contributed By McGuireWoods LLP
The representations and warranties provided in a purchase and sale agreement vary widely, depending on the agreement. Typical representations and warranties include the following:
The buyer’s remedies for a breach vary widely, depending upon what is negotiated in the purchase and sale agreement. In some agreements, it is merely a condition to closing that the representations and warranties be true and correct; in these agreements, the buyer may only recover its deposit and its third party out-of-pocket expenses. In other agreements, the seller may include a provision that prohibits the buyer from suing for any damages for a breach unless and until the aggregate amount of such damages exceeds a certain minimum threshold, whereupon the seller shall be liable for all damages up to a capped amount. In any event, recovery is usually limited to actual damages incurred, excluding consequential, exemplary, or punitive damages.