Understatements/Overstatements Clause Samples
The Understatements/Overstatements clause is designed to address and correct any inaccuracies in the reported amounts, figures, or statements made within a contract. In practice, this clause typically requires the parties to notify each other if they discover that any information provided was understated or overstated, and to make appropriate adjustments to reflect the true values. Its core function is to ensure accuracy and transparency in contractual dealings, thereby preventing disputes or misunderstandings that could arise from incorrect or misleading information.
Understatements/Overstatements. If and to the extent that:
11.12.1 the amount of any allowance, provision or reserve (including any allowance, provision or reserve taken into account in calculating the net value of an asset) made in the Accounts and/or Closing Statement or otherwise taken into account or reflected therein (and not released prior to Closing) (other than an allowance, provision or reserve in respect of Taxation) is found to be in excess of, or unnecessary in respect of, the matter for which such allowance, provision or reserve was made or is established to have been excessive or unnecessary;
11.12.2 any sum is received by any Target Group Company in respect of any asset which has previously been written off as irrecoverable in the Accounts and/or Closing Statement (other than any asset in respect of Taxation); or
11.12.3 the value of any asset in the Accounts and/or Closing Statement (other than any asset in respect of Taxation) is understated or any liability in the Accounts and/or Closing Statement is overstated (other than a liability in respect of Taxation), the amount of such excess, unnecessary allowance, provision or reserve, receipt, understatement or overstatement shall be credited against and applied in relieving the Seller from any liability they would otherwise incur for any Warranty Claim.
Understatements/Overstatements. All transactions that could give rise to an understatement of federal income tax (within the meaning of Section 6661 of the Code as it applied prior to repeal) or an underpayment of tax (within the meaning of Section 6662 of the Code) were reported in a manner for which there is substantial authority or were adequately disclosed (or, with respect to Returns filed before the Closing Date, will be reported in such a manner or adequately disclosed) on the Returns required in accordance with Sections 6661(b)(2)(B) and 6662(d)(2)(B) of the Code.
Understatements/Overstatements. If and to the extent that:
9.12.1 the amount of any allowance, provision or reserve (including any allowance, provision or reserve taken into account in calculating the net value of an asset) made in the Closing Statement and/or (in respect of assets within line items not covered in the Closing Statement) the Accounts or otherwise taken into account or reflected therein (and not released prior to Closing) is found to be in excess of, or unnecessary in respect of, the matter for which such allowance, provision or reserve was made or is established to have been excessive or unnecessary;
9.12.2 any sum is received by any Group Company in respect of any asset which has previously been written off as irrecoverable in the Closing Statement and/or (in respect of assets within line items not covered in the Closing Statement) the Accounts; or
9.12.3 the value of any asset in the Closing Statement and/or (in respect of assets within line items not covered in the Closing Statement) the Accounts is understated or any liability in the Closing Statement and/or (in respect of liabilities within line items not covered in the Closing Statement) the Accounts is overstated, the amount of such excess, unnecessary allowance, provision or reserve, receipt, understatement or overstatement shall be credited against and applied in relieving the Seller from any liability it would otherwise incur for any Claim.
Understatements/Overstatements. If and to the extent that:
1. a provision or reserve has been booked in the Financial Statements in the same category (e.g., stock trade debts, fixed assets, provisions for risks, etc.) as the fact, event, matter or circumstance giving rise to the Claim;
2. the amount of any allowance, provision or reserve (including any allowance, provision or reserve taken into account in calculating the net value of an asset) made in the Financial Statements or otherwise taken into account or reflected therein (and not released prior to Closing) is found to be in excess of, or unnecessary in respect of, the matter for which such allowance, provision or reserve was made or is established to have been excessive or unnecessary;
3. any sum is received by the Company in respect of any asset which has previously been written off as irrecoverable in the Financial Statements;
4. the value of any liability in the Financial Statements is overstated;
5. any tax reimbursement is received by the Buyer or the Company after the Closing Date, if such tax was paid prior to Closing Date or accounted for in the Financial Statements and paid after the Closing Date;
6. the amount of such excess, unnecessary allowance, reimbursement, provision or reserve, receipt, understatement or overstatement shall be credited against the amount of the loss and applied to such extent in relieving the Seller from the liability it would otherwise incur in respect of any claim under this Agreement in the same category.