What to do next
Read the survival, notice and limitation provisions first
Representations and warranties survive for a defined period, frequently shorter for general reps than for fundamental ones such as title and tax. Notice usually has to be in writing, within a set time of discovery, and in a specified form. Miss that and a strong claim becomes unrecoverable.
Identify precisely which representation was breached
Financial statements, undisclosed liabilities, tax, employment and benefits, customer contracts, IP ownership, or compliance. Specificity determines both the evidence you need and how loss is measured - and generic allegations invite a motion rather than a settlement.
Locate the money before arguing about liability
Escrow or holdback funds are the practical source of recovery, and their release usually requires joint direction or a determination under the agreement's mechanism. Where escrow has been released, assess the seller's covenant strength before committing to a fight.
Notify insurers immediately
Representation and warranty insurance, and D&O coverage, may respond. Policy notice provisions are strict and often shorter than the contractual claim period, so notify before the claim is fully formulated.
Check the dispute resolution clause before filing anywhere
Many purchase agreements require arbitration, sometimes seated outside the province, and some route accounting disputes to an independent accountant whose determination is final. Filing in the wrong forum wastes months.
Frequently asked questions
The financial statements were wrong - can I claim?
Likely, if it breaches a representation and you are within the survival and notice periods. Check those provisions before anything else; they are the gate every claim passes through.
What are baskets and caps?
A basket is a minimum threshold before you can claim at all; a cap is the maximum recoverable. Together they can make a real breach commercially unrecoverable, which is why they are negotiated hard at signing.
Is fraud treated differently?
Generally yes - fraud typically falls outside contractual caps and survival limits, which is why it is pleaded where the facts support it. The threshold is high and pleading it carelessly has consequences.
Which court or forum hears this?
It depends on the agreement. Many require arbitration; otherwise the superior court of the province, often on a commercial list where one exists. Accounting disputes may go to an independent expert instead.
What kind of lawyer handles this?
A commercial litigator with M&A experience, working alongside the corporate lawyers who papered the deal. The purchase agreement is the case.
This is general information, not legal advice. Laws vary by location and every situation is different — speak with a qualified lawyer about your specific circumstances.