What’s Up With This M&A Materiality Scrape?

Few topics in acquisition agreements cause as much bewilderment, consternation, and hand-wringing on both sides of the table as the dreaded materiality scrape. Neither seasoned legal practitioners nor savvy clients are immune from the deflating effects of the following words when they appear, lodged within the bowels of the indemnification section of an acquisition agreement:

For purposes of this indemnification section, any inaccuracy in or breach of any representation or warranty shall be determined without regard to any materiality, material adverse effect or other similar qualification contained in or otherwise applicable to such representation or warranty.

This provision, in all ...