“Deemed to Be Continuing”?

Behold the following:

The Sponsor hereby represents and warrants to BNY Mellon, which representations and warranties shall be deemed to be continuing, that: …

I’ve seen this provision in different kinds of contracts, notably lending agreements. But I haven’t found any commentary about it. And I don’t believe it’s mainstream in M&A. Here’s how a related concept is usually expressed in M&A termination provisions:

by the Buyer, if any representation of the Seller stated in this agreement was inaccurate when made or becomes inaccurate such that the condition stated in section ____ [the bringdown condition] would not be satisfied; …

Here’s my version of that, stated in The Structure of M&A Contracts (as further revised to use the term statement of fact instead of representation):

by the Buyer, if any statement of fact made by the Seller in article 2 as of the date of this agreement could not be made again on any date after the date of this agreement and before the Termination Date so as to satisfy the condition stated in section ___ [the bringdown condition]; …

But to go back to deemed to be continuing, I suggest that it’s not clear what it means. I’d prefer to spell out the implications, in the manner of my M&A language.

Anyone have any views on this? Do you know of any commentary on it?

About the author

Ken Adams is the leading authority on how to say clearly whatever you want to say in a contract. He’s author of A Manual of Style for Contract Drafting, and he offers online and in-person training around the world. He’s also chief content officer of LegalSifter, Inc., a company that combines artificial intelligence and expertise to assist with review of contracts.