No statute governs an undefined knowledge qualifier. Absent a named Knowledge Group, Canadian courts read a corporation's knowledge broadly — which can include any employee with direct responsibility for the fact in question, not just the signing officers.
Short answer
Left undefined, “to the seller's knowledge” is not limited to the signing officers — a corporation acts and knows through its people, and absent an express definition confining the phrase to a named list of individuals, a court has no textual basis to read it that narrowly, which means the knowledge of an ordinary employee with direct, first-hand responsibility for the relevant fact can be attributed to “the Seller.”
No statute governs the construction of an undefined knowledge qualifier in a Canadian share purchase agreement. It is a matter of contractual interpretation, read in the context of the document as a whole and what the parties can be taken to have intended a corporate vendor's “knowledge” to mean in a transaction of this kind.
A seller's position that only the signing officers' personal knowledge counts asks a court to read a limitation into the agreement the parties never wrote. A buyer's position — that an employee with direct, first-hand responsibility for the very fact the representation is about had knowledge properly attributed to the corporation — needs no such addition; it follows from the ordinary meaning of corporate knowledge unless the drafting says otherwise. But reaching that answer is itself costly: without a named Knowledge Group, neither side can identify, until well into litigation, whose evidence the case actually turns on, and discovery can end up examining far more people than a defined group would have required.
A defined Knowledge Group — naming specific officers, paired with a stated duty to make reasonable inquiry of their direct reports before signing — turns the threshold question into a matter of contract rather than open-ended interpretation, and is the standard fix sophisticated buyers' and sellers' counsel negotiate for precisely to avoid this uncertainty.
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