Fundamental Reps
The category of representations that survive longer and have higher caps than general reps in an SMB acquisition.
- Identification of which reps are fundamental
- Survival period for fundamental reps
- Cap structure for fundamental reps
- Carve-outs from basket and from general cap
If this clause already feels aggressive in isolation, upload the full contract and see how it combines with payment terms, liabilities, and exit rights.
Analyze My ContractWhat this clause actually does
Fundamental reps are the foundational representations that the seller must back without limit: title to assets, due authorization, capitalization, and tax matters. They typically survive indefinitely (or for the statute of limitations) and are capped at 100% of purchase price (or uncapped). Specific reps cover specific operational matters and survive 12 to 24 months.
Why people get burned by this clause
If the seller did not actually own what they sold (title rep), or did not have authority to sell (authorization rep), the buyer needs full recovery without the limits of general reps.
What should make you slow down
- Title rep capped at general reps cap (10% to 25% of purchase price)
- Authorization rep has 12-month survival
- Tax reps capped below 100% of purchase price
- Capitalization rep missing entirely (in stock deals)
- Fraud carve-out does not include fundamental rep breaches
Where you usually see it
- Asset purchase agreements
- Stock purchase agreements
What the platform checks in the live contract
- Identification of which reps are fundamental
- Survival period for fundamental reps
- Cap structure for fundamental reps
- Carve-outs from basket and from general cap
- Fraud and willful misconduct interplay
What stronger language usually looks like
- Fundamental reps clearly listed: title, authorization, capitalization, taxes
- Survival of statute of limitations or longer
- Cap at 100% of purchase price or uncapped
- Excluded from basket entirely
- Fraud carve-out is uncapped
Definitions worth opening next
Articles that go deeper
Fundamental reps are the seller's ultimate accountability. Title, authorization, capitalization, and taxes must be uncapped or near it.
See how this clause behaves in the real contract.
The clause library gives you judgment. The full review shows how this clause combines with the rest of the agreement, then quotes the exact language, scores the risk, and explains what to push on next.