Does a partner buyout still need representations and warranties like a sale to a stranger would?

Yes, and it's worth insisting on this even though the buyer already knows the business well. Representations and warranties in a partner buyout protect the remaining owner against liabilities or issues the departing partner may know about but the buyer doesn't — undisclosed disputes, side arrangements the departing partner made on the company's behalf, tax issues, or other matters that day-to-day familiarity doesn't necessarily reveal.

Because the buyer often skips the kind of extensive due diligence a true outsider would do, precisely because they already know the business, well-drafted representations and a proper disclosure schedule become even more important as a substitute for that missing investigation, not less important. Dropping reps and warranties to keep a partner buyout simple or amicable removes exactly the protection meant to catch what informal familiarity misses, and it's one of the more common ways these transactions end up under-protected compared with an arm's-length purchase.