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Training Guide

Fraud Carve-Outs


Training Guide

Fraud Carve-Outs

M&A Provisions
Remote or in person

What’s Covered

  • Negotiating fraud carve-outs
  • Risks of leaving Fraud undefined
  • Well-defined fraud carve-outs
  • No-reliance clauses and fraud carve-outs
  • Judicially created fraud carve-outs
  • Fraud carve-out market trends
  • Drafting tips
  • Sample provisions

Before the Session

Prepare the Attendees

Send the attendees an invitation for the session. Include this link, which has the videos and exercise they’ll need to prepare.

Prepare Yourself

Watch the videos and read the exercise so you’re familiar with the Hotshot material.

  • still frame from Explaining Fraud Carve-Outs


    Fraud Carve-Outs

    An introduction to fraud carve-outs and the issues parties consider when defining fraud, such as who’s liable, whose knowledge matters, what types of fraud claims can be brought, and what statements can form the basis for a fraud claim. Features interviews with ABA M&A Committee members Glenn West from Weil, Gotshal & Manges LLP and Tali Sealman from White & Case LLP.

  • still frame from Drafting


    Fraud Carve-Outs: Drafting

    A look at different approaches to drafting a fraud carve-out in an acquisition agreement. Includes drafting tips and perspectives from ABA M&A Committee members Tali Sealman from White & Case LLP and Glenn West from Weil, Gotshal & Manges LLP.

  • Icon of a document


    Fraud Carve-Outs


During the Session

Part 1: Knowledge Check
Ask attendees these questions to ensure they understand the topic:
  • Where are fraud carve-outs usually included in acquisition agreements? 
  • Which party usually benefits from a narrower definition of Fraud in the fraud carve-out? Why?
  • What are some consequences of leaving Fraud undefined in a fraud carve-out?
  • What points does a well-defined fraud carve-out explain? 
  • What are some of the consequences of including a fraud carve-out in an agreement governed by Delaware law?
  • What are some characteristics of a buyer-friendly fraud carve-out? What about a seller-friendly fraud carve-out?
Part 2: Group Exercise
Lead a group discussion based on the exercise. To encourage collaboration, divide the attendees into groups to discuss the exercise, then have a representative from each group summarize their views to the larger group. Call on people to share their thoughts and ask others to respond.
Tip for remote sessions: use your web conferencing system’s breakout room feature to divide people into groups.
Part 3: War Stories and Firm Specifics
Share your own experiences and guidance, including:
  • Anecdotes and war stories (e.g., about a near-disaster or a tough negotiation)
  • General practice tips (dos and don’ts)
  • Firm-specific guidance and practices

After the Session

To continue their learning, attendees can check out related courses in Hotshot’s M&A Provisions topic.

About Hotshot

Hotshot helps lawyers develop their legal, business, and technology skills through short videos, quizzes, and summaries, and we help law firms and law schools plan and deliver engaging training programs. Our customers include Am Law 200 firms, top law schools, and regional and international firms.

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