Sandbag Provision
Private Equity glossary · Private Equity Fundamentals
Definition
Provision in an SPA addressing whether a buyer can claim indemnification for breaches it knew about pre-closing (pro-sandbag vs anti-sandbag).
Sandbag Provision in plain English
A sandbag provision settles an awkward question in a purchase contract: if the buyer already KNEW, before closing, that one of the seller's promises was false, can the buyer still collect money for it afterward? "Pro-sandbag" says yes — a promise is a promise, so the buyer can claim even on problems it spotted early (this favors the buyer). "Anti-sandbag" says no — you can't stay quiet, close the deal, then demand a refund for something you already knew (this favors the seller). It's basically the deal's rule on whether the buyer is allowed to keep a known problem in its back pocket.
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