The survival period is how long after closing a seller’s representations and warranties in a Canadian purchase agreement remain open to an indemnity claim — a term the parties set themselves, not one fixed by statute.
Treadstone Law is direct about the gap: “there is no standard, fixed period set by Ontario law for any of these categories.” General and operational representations are “usually given the shortest negotiated survival window, since problems in these areas tend to surface fairly quickly”; fundamental representations — title to the shares, corporate capacity — are “often given a materially longer survival period than general reps, sometimes drafted to survive indefinitely”; and tax representations are “frequently carved out into their own period, often tied to how long the relevant tax authority could still reassess the business.”
That last category has a real statutory anchor. ITA s.230(4)(b) requires a business’s records and books of account to be retained “until the expiration of six years from the end of the last taxation year to which the records and books of account relate” — which is why buyers commonly push tax representations to survive on a similar clock to the period the CRA itself can still reopen the file. Survival period, basket and cap are negotiated as a package: a seller who concedes ground on one commonly expects to hold the line on another.
Suppose an Ontario share purchase agreement sets an 18-month survival period for general and operational representations, a six-year survival period for tax representations tracking the ITA’s own retention window, and no survival cap at all — effectively indefinite — for fundamental representations. A breach of an environmental representation surfaces in month 20. If environmental representations were bundled into the general category, the claim is time-barred. If the parties instead carved environmental representations into their own longer category — a common ask from buyers of industrial or manufacturing targets — the claim survives.
See also: Indemnity basket, Indemnity cap, Warranty and indemnity insurance
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