Can a sandbagging clause let me sue over a problem I suspected before closing but never confirmed?
It depends on how broadly the sandbagging clause is written. A "pro-sandbagging" clause lets a buyer bring an indemnity claim for a breach of a representation or warranty even if the buyer knew, or had reason to believe, something was wrong before closing — the idea being that the seller made a promise regardless of the buyer's own diligence, and should not escape liability just because the buyer had a suspicion rather than certainty. Where a clause is drafted this broadly, mere suspicion that later turns out to be correct generally does not bar the claim.
The result can differ if the clause is narrower, for example if it only addresses "actual knowledge" as confirmed fact rather than suspicion, or if the agreement is silent on sandbagging altogether, since Ontario has no single settled rule filling that gap and courts may look closely at what the buyer actually knew and when. Because the line between a vague suspicion and confirmed knowledge can be argued both ways, a buyer in this position should have the specific clause and the diligence record reviewed before assuming the claim will succeed.
Key takeaways
- A broad pro-sandbagging clause can preserve a claim even over a pre-closing suspicion.
- Narrower clauses limited to confirmed "actual knowledge" may treat suspicion differently.
- Ontario has no single settled default rule where the agreement is silent on this.
- What the buyer actually knew, and when, will likely be closely scrutinized.