All Purchase Agreements have Representations and Warranties put forth by seller. If there is a breach the buyer will have certain financial remedies. There are Fundamental Reps and Warranties, like anything that is considered fraud. In this case, the buyer may be entitled to the entire purchase price to be reimbursed. This is highly unlikely. Standard Reps and Warranties are usually for non-compliance issues which may have a M.A.E. (Material Adverse Effect), such as a labor code that is not followed. When considering an offer, a buyer will normally reserve a percentage of the purchase price for a period of time to be a “Hold-back”. If there are any losses due to breach or reps and warranties, these monies are used. It is rare that buyers make a claim and sellers are not paid on Hold Back amount.