Difference Between Surviving Closing and Merging on Closing

Posted on: Friday, July 20th, 2012

In real estate transactions the deal is closed and the transaction is completed once the money and documentation have been exchanged and the Transfer registered. However, certain warranties and representations can ‘survive’ the closing of the deal, if it is outlined in the contract as such. For example, a common clause that indicates survival is “this warranty (or representation) shall not merge, but shall survive the completion of this transaction”. This wording indicates that both parties agree that the representations or warranties made shall remain in full force and effect for a certain time period following the closing.

On the other hand, representations and warranties can sometimes “merge” on closing, which is represented by a clause such as this: “representations and warranties made by the seller herein and all other provisions of this agreement shall be deemed merged on closing.” This clause relates to the legal doctrine of merger which indicates that the contractual warranties and representations will not survive the closing. Instead, they are “merged” into the final representations and warranties that are stated within the closing documents that conclude the transaction.

The content of this blog is intended to provide a general guide to the subject matter. The information does not constitute legal advice and a solicitor and client relationship is not created.

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