At Singleton Reynolds, our people are what makes us great. We come together every day with the common goal of providing exceptional legal services and ensuring we go above and beyond for each and every client.
The range of backgrounds of the partners, counsel, associates and staff of Singleton Reynolds enables us to offer a broad range of services.
Singleton Reynolds’ lawyers spend a significant amount of time researching and thinking about how industry or legislative changes could affect your business.
Singleton Urquhart Reynolds Vogel LLP is recognized as a leader in construction and infrastructure, insurance, commercial litigation, real estate and business law.
Singleton Reynolds has offices to serve you in Vancouver and Toronto.
How was Singleton Reynolds first established? Find out more here.
Recognizing the leadership that contributes to the company successes.
Singleton Reynolds prides itself in being a leader in corporate social responsibility. We encourage diversity, charity, mentorship, civic dedication and neighbourhood support.
Singleton Reynolds strives to understand the balance between your career and your personal goals and encourages our legal and operations staff in the pursuit of their interests outside of the firm.
We are always on the lookout for talented professionals to contribute to our team. Singleton Reynolds offers a professional and challenging work environment, with a competitive compensation and benefits package.
Our goal is to develop strong lawyers from student right through to partner. Mentoring and training start when you are a student and continue throughout your practice.
Representations and warranties are common tools used in purchase and sale transactions to allocate risk between the parties and provide a foundation for parties to enforce remedies against each other. A representation is an assertion that a fact, material to the transaction, is true as of a certain date, while a warranty is a promise to indemnify a false assertion. Parties often disagree on representations and warranties, and particularly on the protection against breaches of such terms. As a purchaser, you’re looking for maximum protection and ideally, as much of a holdback or a portion of the purchase price as possible. As a vendor, you’re looking for minimum responsibility to indemnify and receipt of the purchase funds as fast as possible post-closing. To avoid potential stalemate, parties in a transaction may wish to consider obtaining representations and warranties insurance (“RWI”).
RWI is an alternative risk allocation method to protect the insured party from losses and liabilities incurred from inaccuracies of representations and warranties discovered post-closing. Instead of using traditional methods of indemnities and holdbacks, RWI allows the parties to pass on such responsibilities to the RWI insurer. You can purchase RWI either as the purchaser (buy-side policy) or the vendor (sell-side policy), and it is possible for both parties to share the RWI premium. In most transactions, the parties opt for a buy-side policy as it is the purchaser who is generally seeking the protection. Both RWI policies likely have a deductible, and they will not cover breaches known to the insured prior to purchasing the RWI. While RWI is generally a blanket policy, you must be aware of the exclusions.
RWI provides additional flexibility for parties to negotiate on terms of the transaction which promotes confidence and efficiency in closing the transaction. If you’re a purchaser, RWI can enhance your bid and may provide against potential financial loss through the enhanced survival period and coverage of the representations and warranties. It may also provide greater comfort to any third party lender who is funding the purchase. If you’re a vendor, RWI can reduce your indemnity obligations, limit subsequent exposure to potential liabilities, and promote faster access to the funds.
RWI is useful when traditional security measures over representations and warranties (ie. indemnification and holdback) are insufficient or cannot be negotiated successfully. The benefits of RWI are particularly useful in certain transactions:
RWI may not be appropriate in other transactions:
In summary, RWI can be an effective tool for parties to have to resolve issues that might otherwise impede a transaction. It is important for you to review your transaction with your lawyers, advisors and insurance advisors/brokers to determine if RWI can be helpful.
In our next article, we will discuss anti-sandbagging clauses in a purchase and sale agreement.
For more information, please contact:
News + Insights | Jul 24, 2019
Firm News | Apr 29, 2019
Articles | Feb 22, 2019
Or call toll-free at 1-877-682-4404 or (604) 682-7474 (Vancouver) or (416) 585-8600 (Toronto)
This field is required