Mergers & Acquisitions Publishes Article by Andrew Lucano on Fraud Carve‑Outs in M&A Agreements

Mergers & Acquisitions featured an article by Andrew Lucano, chair of Seyfarth's Corporate department, in its May/June issue. The piece, “When Fraud Carve‑Outs Go Too Far,” examines how broadly drafted or undefined fraud carve‑outs in private M&A agreements can expose sellers to uncapped and unintended post‑closing liability. 

Drawing on market data, Delaware case law, and a practical hypothetical, the piece highlights why careful drafting of fraud definitions is critical to preserving the parties’ negotiated allocation of risk. Lucano outlines best practices for sellers to limit fraud carve‑outs to intentional misconduct, contractual representations, and designated individuals with actual knowledge.

As Lucano emphasizes:

“Sellers should define fraud to require actual knowledge of falsity and intent to deceive, rather than recklessness, negligence or constructive knowledge.”

The full article is available here (subscription required).