Chancellor Explains How Representations And Warranties Work
Posted In M&A
GRT, Inc. v. Marathon GTF Technology Ltd., C.A. 5571-CS (July 11, 2011)
One of the more misunderstood aspects of merger agreements is how their representations and warranties are intended to work. Do they continue after closing? What is the limit on when litigation may be filed over any breach? This decision answers those questions and is therefore essential reading for those who deal in these agreements.
Of particular importance is the decision's holding that a 1 year limitation of litigation is binding and may cut off claims for breach of the representations and warranties.