미국의 진술 및 보장 조항에 관한 최근 동향

In a typical M&A purchase agreement, The basic transaction documents typically contain representations and warranties of the buyer and the seller to one another, which set forth the basic assurances of a party that certain facts are true and may be relied upon when entering into the transaction. Representations and warranties disclose material facts about the assets or stock that are being purchased and the liabilities that are being acquired or assumed. Representations and warranties are the contractual tool that buyers and sellers use in an M&A transaction to allocate the risk of these imperfections. And the most obvious role of representations and warranties is to set out the premises the parties relied on in agreeing to the deal and allow them to make claims each other if the actual facts turn out to be different. Typically, a breach can be occur when buyer disputes one of those reps or warranties. The buyer that relied upon the misrepresentation may seek remedies that are available under the agreement. These remedies may include the right to terminate the agreement if the event is discovered prior to closing, or indemnification claims for misrepresentations discovered after closing. In recent years, Researches about representation and warranty provisions in the M&A transactions are being conducted in Korea little by little and some lower court cases dealing with such incidents have emerged' but the Supreme Court ruling did not come out yet. And what is more, the lower court cases do not shown a unified look. I think that we should do not undermine the original implications in the representation and warranty provisions at the Anglo-American agreement, which is playing the role of the distribution of risk and price adjustment and supplement of due diligence and informational asymmetry. Because M&A transaction especially requires international convergence. In an M&A deal, the buyer may determine that in order to obtain the benefit of the bargain it contemplated when signing, the best course of action would be to close on the transaction despite its knowledge of such breach, and to thereafter hold the seller liable for its breach of representation and warranty post-closing. This concept, known as “sandbagging,” refers to the right of a buyer to bring an indemnity claim based on known seller breaches prior to closing. But this provision is not well known to the Korean lawyers and scholars. And insurance to provide coverage for breaches of representations or warranties in M&A transaction documents has been available in the marketplace for several years In America, but the specialty insurance product has not always been fully understood. More recently, interest in the product has grown and the product has improved, and so take-up for the product has increased as well. However, there is no such insurance products in Korea and research paper about them.