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Seller Representation

Definition - What does Seller Representation mean?

A seller representation is a formal description of a seller's platform in acquisition agreements that reveals facts in a program of due diligence. The purpose of a seller representation is to act as a device for obtaining disclosure about the seller and the business being sold in relation to the buyer's interest to purchase its assets. It also serves as the foundation to promote the buyer's right to terminate the acquisition agreement, either prior to or at the closing period of the agreement. The process of the seller's due diligence investigation is undertaken by the buyer during this stage.

Seller representation may also be known as agent representation.

Divestopedia explains Seller Representation

The scope of the seller's representation depends on the relative bargaining power of both parties. When there is competition for a seller, the buyer may choose to scale down the representations made in order not to adversely affect its decision to agree with the acquisition. Similarly, the buyer exercises this right when the acquisition agreement represents an attractive buying opportunity.

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