Incredible Wording Game
A bunch of leading corporate lawyers were invited to the M&A class by Vice Chancellor Strine, in order to explain the merger contract clauses to us. I was struck by their skill of playing with words. For them, it is truly “life is like a law school examination everyday”. i.e. Accuracy of Representations could be written as:
Each of Target’s representations and warranties shall have been accurate in all material respects as of the date of this Agreement and shall be accurate in all material respects as of the Closing Date.
How do you like it? — It may well be the following:
Target’s representations and warranties shall be accurate in all material respects as of the Closing Date as if made on and as of the Closing Date (except for any representation or warranty that, by its terms, is made as of the date of this Agreement or as of an earlier specified date, which need only be accurate in all material respects as of such date); provided, however, that any inaccuracies in such representations and warranties shall be disregarded unless such inaccuracies have a Material Adverse Effect on Target.
What has been done seems to me just added some cliché and a vague MAE clause. But the real effect, as Judge Strine put it, is replacing everything with MAE, which is hard to prove and subject to judicial discretion.
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