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Buying & Selling a Business

Can I insist on a sandbagging clause even if the seller doesn't want one?

TSL Written by the Treadstone Law team· Updated August 2026

You can insist on proposing it, but you can't force the seller to agree — like most terms in a purchase agreement, whether a pro-sandbagging clause ends up in the final document is a matter of negotiation, not something either side can unilaterally impose. As the buyer, you're entitled to push hard for language preserving your right to claim on a breach even if you knew about the underlying issue before closing, since it protects you from having a known problem used as an excuse to deny an otherwise valid claim later.

Sellers resist this for an understandable reason: without an anti-sandbagging clause, a buyer who spots a problem during diligence has less incentive to negotiate over it before closing and more incentive to stay quiet, close, and bring an indemnity claim afterward instead. This tension is exactly why sandbagging provisions are among the more actively contested terms in mid-market deals, and the outcome often reflects each side's relative negotiating leverage as much as pure legal principle.

If the seller won't agree to pro-sandbagging language, understand what that means practically for how you should handle anything you discover during diligence, and get a Treadstone business lawyer's advice on how to protect yourself under whatever the final position ends up being.

Key takeaways

  • You can push for a pro-sandbagging clause, but the seller has to actually agree to it.
  • Sellers resist it because it can discourage buyers from raising issues before closing.
  • This is one of the more heavily negotiated clauses, often decided by relative leverage.
  • If the seller won't agree, get advice on how to handle discovered issues under the final position.
This is general information, not legal advice. It doesn’t create a lawyer–client relationship, and the rules can change. For advice on your situation, a Treadstone business lawyer can help.
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