What can I do if the seller misrepresented the business?

Finding out after closing that a number, a customer relationship or a legal fact was not what the seller represented is one of the more common post-closing disputes in a business sale. What a buyer can actually do about it depends far less on how unfair it feels and far more on what the purchase agreement itself says.

The purchase agreement is usually the first place to look

Representations and warranties are the seller’s contractual promises about the state of the business, and if one of them was false when made, the buyer’s remedy typically runs through the indemnity clause tied to it rather than through a separate lawsuit. Indemnity clauses commonly set thresholds, caps and procedures for making a claim, and missing those procedural steps can weaken an otherwise valid claim.

The disclosure schedule can change the answer entirely

A representation is usually qualified by whatever the seller listed on the disclosure schedule, so a fact the seller flagged there is not a false representation even if it turns out to be a real problem. Buyers who skip a careful read of the schedule against the representations often discover, too late, that the issue they are upset about was disclosed all along.

Timing matters — the survival period and any holdback

Most agreements limit how long after closing a representation can still be relied on, through a survival period, and many pair that with a holdback or escrow set aside specifically to fund claims made within that window. A claim raised after the survival period has run, or after a holdback has already been released, is a materially harder claim to bring.

Remedies outside the contract

Where a misrepresentation was made fraudulently or negligently, remedies can exist independently of the contract’s indemnity mechanics, and courts consider factors like what was actually said, what a reasonable buyer would have relied on, and what due diligence the buyer itself conducted. These claims are fact-specific, and provincial law varies on how they interact with the contract’s own remedy provisions.