| Commentary

126.1 Purpose

| Commentary

126 Retention clauses

126.1 Purpose

Although a buyer may have a comprehensive set of warranties with very few seller protection clauses1, those warranties will only have any value if the sellers are ‘of substance’. Accordingly, the buyer should consider whether he requires a retention clause in the share sale agreement stipulating that part of the purchase price be deposited in a joint account2 for a fixed period to provide a fund out of which any liability under warranty claims may be discharged3. How much of the purchase price is retained will depend upon what is

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