| Commentary

152 Warranties required by managers

| Commentary

3: WARRANTIES

152 Warranties required by managers

It would be inadvisable for sellers to provide warranties and indemnities to managers of the business who are to take it over, although it is often argued that the finance providers will require these protections. The sellers should resist, in that they could well be liable for misdemeanours or negligence for which the managers will have been responsible; and the sellers should require the managers to carry out due diligence on the target’s affairs in which the managers have had little involvement. This argument would not apply, of course, in relation to managers

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