Sandbagging

How a buyer’s knowledge before closing affects its remedies for a breached representation or warranty. A pro-sandbagging clause may preserve an otherwise available claim despite specified knowledge; an anti-sandbagging clause may restrict claims within its scope.

Sandbagging in practice

Hypothetical: diligence reveals an unpaid tax assessment that contradicts a seller representation. Assume the assessment was not disclosed as an exception and the representation is breached. A pro-sandbagging clause may prevent the specified pre-closing knowledge alone from barring an otherwise available claim. An anti-sandbagging clause may bar that claim if the knowledge falls within its scope. Other remedy conditions still apply.

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