Liability and recourse
In the US, the liability regime typically has more "teeth" from a buyer's perspective, with representations and warranties often given on an indemnity basis and backed by significant sums held in escrow or otherwise retained by the buyer (a so-called "holdback"), making it easier for buyers to establish and recover losses on a dollar-for-dollar basis if issues arise.
By contrast, in the Czech Republic, a successful representation and warranty claim will require a buyer to prove that the breach resulted in a damage for the buyer or the target and will be subject to limitations, including a requirement for a buyer to seek to mitigate its loss.
Warranty and indemnity insurance (“W&I”) has become an effective bridge when it comes to these differing approaches in recent years, with its prevalence giving sellers more of an opportunity for a "clean break" by allowing them to give representations and warranties subject to nominal (e.g., EUR 1.00) liability caps, with the buyer's principal mode of recovery now being against the insurance policy. This set-up also often appeals to buyers if the management team are staying on in the business as it offers them a means of recovery without having to "offside" that team by bringing a claim against them, although many US strategic buyers still favour a more traditional approach to liability.
That said, insurance does not cut through all potential points of difference – buyers may require sellers to cover the cost of a policy and stand behind both the deductible/excess (i.e., the initial portion of loss that an insurer will not cover) and any areas excluded from cover (for instance, a known issue identified during due diligence).
Austria
In terms of the disclosure process, Austrian law acquisition agreements commonly permit sellers to disclose matters generally to the buyer (as well as making specific disclosures), such as all the contents of a data room fairly disclosed to the buyer, to qualify the representation and warranties and limit the potential liability of sellers. By contrast, US buyers will expect sellers to specifically disclose all relevant matters against each of the warranties (“disclosure letter”), which can be a much more laborious approach. A common compromise in this situation would be to generally disclose a more limited bundle of documents.
Czech Republic
In terms of the disclosure process, Czech law acquisition agreements commonly permit sellers to disclose matters generally to the buyer (as well as making specific disclosures), such as all the contents of a data room fairly disclosed to the buyer, to qualify the representation and warranties and limit the potential liability of sellers. By contrast, US buyers will expect sellers to specifically disclose all relevant matters against each of the warranties (“disclosure letter”), which can be a much more laborious approach. A common compromise in this situation would be to generally disclose a more limited bundle of documents.
Poland
In terms of the disclosure process, Polish law acquisition agreements commonly permit sellers to disclose matters generally to the buyer (as well as making specific disclosures), such as all the contents of a data room fairly disclosed to the buyer, to qualify the representation and warranties and limit the potential liability of sellers. By contrast, US buyers will expect sellers to specifically disclose all relevant matters against each of the warranties (“disclosure letter”), which can be a much more laborious approach. A common compromise in this situation would be to generally disclose a more limited bundle of documents.
Hungary
With respect to the disclosure process, acquisition agreements governed by Hungarian law generally permit sellers to qualify representations and warranties in order to limit their potential liability. This is typically done through both specific disclosures and more general references, such as granting access to the entire data room. By contrast, US buyers often expect a more detailed and granular approach, requiring sellers to disclose all relevant matters against each warranty in a carefully drafted disclosure letter. Preparing such a disclosure letter is often significantly more labor-intensive and time-consuming than simply populating a data room.
To bridge these differing practices, parties frequently agree on a compromise approach—for example, referencing specific folders in the data room or attaching targeted disclosure schedules to the transaction documents. This hybrid model seeks to balance the buyer’s need for precision and legal certainty with the seller’s preference for efficiency and practicality.
Slovakia
In terms of the disclosure process, Slovak law acquisition agreements commonly permit sellers to disclose matters generally to the buyer (as well as making specific disclosures), such as all the contents of a data room fairly disclosed to the buyer, to qualify the representation and warranties and limit the potential liability of sellers. By contrast, US buyers will expect sellers to specifically disclose all relevant matters against each of the warranties (“disclosure letter”), which can be a much more laborious approach. A common compromise in this situation would be to generally disclose a more limited bundle of documents.
In Slovakia, acquisition agreements also contain an extensive and detailed catalogue of representations and warranties, covering corporate matters, assets, contracts, employees, tax, litigation, environmental issues, and other areas. Alongside general representations, it is also common to see specific indemnities covering identified risks. However, rather than relying heavily on escrow or holdbacks, Slovak practice focuses on contractual limitations of liability: de minimis thresholds for small claims, baskets requiring an aggregate amount to be exceeded before claims can be brought, and caps (often tiered by risk category, such as higher caps for tax or environmental matters). Time limits for bringing claims are also a central feature, typically between 6 and 36 months for general warranties, with longer periods for specific risks such as tax or real estate. W&I insurance is still relatively rare in Slovak deals, though availability and use are slowly increasing.