This document is an optional clause which can be used in sale of business agreements.

It is common in sale of business agreements for vendors to limit the amount they may pay where there is a breach of warranty or a general breach of the agreement. The limitations would include the Vendor not being responsible for consequential loss, or to the extent that the purchaser contributes to the breach.

Using this precedent

This precedent clause can be used in a sale of business agreement. This precedent could also be used to replace the “Warranties” provisions in the separate precedents “Business sale agreement – sale of shares (short form)” and “Business sale agreement – sale of assets (short form)”.

When inserting this optional clause into an agreement, care must be taken to ensure that the agreement remains consistent. Cross-references, definitions and schedules should all be checked.

This document has been authored by Elise Margow, Principal, Legally Speaking. Updated with Breach clause by Roxanne Hart Olegal

This document is prepared with the assistance of Specialist Editor Murray Landis, Partner, K&L Gates.