A pro-sandbagging provision preserves indemnification regardless of the buyer's knowledge. An anti-sandbagging provision bars claims for breaches the buyer knew about. Silence produces uncertainty resolved by state law.
Delaware generally permits sandbagging absent contrary language.
Alternative Names:
Pro-Sandbagging Clause|Anti-Sandbagging Clause
Why it Matters?
Silence is the risky drafting choice, since jurisdictions divide on the default rule and litigating it after a claim arises is expensive. Delaware permits recovery despite knowledge absent contrary language, while other states bar it on reliance grounds. For buyers the pro-sandbagging provision preserves the benefit of diligence, since a buyer that discovered an issue and priced it should not forfeit the indemnity.
Frequently Confused with
Related terms
Frequently asked questions
What is the default rule?
Why does silence create risk?
