A Joint Defense & Common Interest Agreement protects privileged communications among aligned parties in litigation. This playbook provides guidance on scope, waiver risks, and confidentiality obligations.
Why This Matters: Overly broad or inaccurate representations can expose parties to unexpected liability and litigation. Tailoring these provisions reduces the risk of materially inaccurate statements and expensive indemnity claims.
Negotiation strategy
If you're the Party A:
Ensure that all representations are backed by thorough due diligence. Insist on materiality qualifiers and appropriate time frames to limit liability.
If you're the Party B:
Negotiate to limit the scope of representations to avoid overcommitment. Ensure that any exceptions are clearly documented in the disclosure schedules.
Essential elements
1
Organization and Authority
Party's legal standing and power.
2
Due Authorization
Approval of agreement execution.
3
No Conflicts
Agreement compliance with laws.
Action framework
ACCEPT
Propose edits when representations are too broad or lack materiality qualifiers.
EDIT
Reject clauses that impose unreasonable liability or are unsupported by due diligence.
ADD
Add language to address specific risks identified during due diligence.
PRO TIP
Always cross-reference representations with due diligence findings to ensure accuracy and completeness.
Example clauses
FAVORABLE
Standard Representations and Warranties
"Each party represents and warrants to the other party as follows: Organization and Authority, Due Authorization, No Conflicts, Consents and Approvals, Accuracy of Information, Compliance with Laws, Litigation."
NEUTRAL
Jurisdiction-Specific Language
"Modify the clause to include jurisdiction-specific language and requirements."
UNFAVORABLE
Overly Broad Representations
"Each party represents and warrants all information is true without any materiality qualifiers."
Fallbacks
High-Risk Projects
In high-risk projects, representations should be more detailed and include specific risk mitigation measures to protect both parties.
Cross-Border Transactions
For cross-border deals, ensure compliance with international laws and include representations about foreign regulatory approvals.
Start-Up Acquisitions
In start-up acquisitions, focus on intellectual property representations and the accuracy of financial statements.
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WEEK 3
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