This note will examine the variables that effect the way that courts may limit parties’ contractual freedom to shorten or lengthen statutes of limitation. It will describe the legal levers that determine the applicable survival period and suggest ways that parties can reduce legal uncertainty around the “basket” of provisions including reps, warranties, survival, and indemnification periods. One key detail examined by this note is “borrowing statutes ”that could operate to import another state’s controlling statute. Additionally, this note will discuss ways in which the contractual right to indemnification for breached reps and warranties is a substantive right that is inextricably tied up with the duration of the right in such a way that statutes of limitation should not be implicated. Specifically, this note will argue that a contractual indemnification and the concomitant survival period is distinct from the common law right to sue for misrepresentation. This distinction makes it illogical for courts to invalidate bargained-for survival periods on the grounds that they violate the statute of limitations.
Getting What You Bargained for: Avoiding Legal Uncertainty in Survival Clauses for a Seller's Representations and Warranties in M&A Purchase Agreements,
12 J. Bus. Entrepreneurship & L.
Available at: https://digitalcommons.pepperdine.edu/jbel/vol12/iss1/1