Are there different types of representations in a contract of sale?
New Jersey business transactions attorney, Harold I. Steinbach, discusses the different levels of representation like absolute, best of our knowledge, materiality and others.
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Phone: (201) 525-1990
Yes, there are. Each representation get negotiated, so a representation may be absolute, it’s an absolute statement there are no litigations against us. Whereas another one might be to our knowledge, there are no environmental violations. Or it might be to the best of our knowledge or it might be to our knowledge after due investigation. And if it’s a company whose knowledge are we talking about, just the CEO, the board, senior management? Also, different statements might be modified by materiality, so there are no material claims against us. So if something was a minor claim in material, it wouldn’t even rise to level of needing to be disclosed. Or you might say we’ve qualified everyone everywhere we need to except where the failure to do so will not have a material adverse impact on the business taken as a whole. So each one of these things is a negotiation and the standard of whether this misrep may vary from one rep to the next.