Corporate litigation: Big-boy letters and non-reliance provisions

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Private investment transactions between sophisticated parties often include a negotiated agreement, sometimes called a ‘big-boy letter’, in which the buyer acknowledges that it has made its own independent assessment of the risks involved, including that the seller or other counterparty may possess material, non-public information regarding the issuer which has not been disclosed to the buyer. Big-boy letters typically contain a non-reliance provision in which the buyer represents that it has made its investment decision based on its own knowledge and investigation without regard to anything the seller has said or not said (or only relied on specific representations contained in the parties’ definitive agreement).

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