What does it mean when an agreement says something is true 'to the seller's knowledge'?

It's a deliberate limit on how far a representation goes. Instead of promising something is absolutely true, the seller is only promising it's true as far as a defined group of people actually knew, or reasonably should have known after some level of inquiry, at the time the agreement was signed. It converts an absolute statement into a qualified one, and shifts real risk back toward the buyer for anything the seller genuinely didn't know about.

The practical fight in drafting is almost always over two things: who counts as "the seller" for this purpose, and how much inquiry that knowledge is deemed to include. A knowledge qualifier tied to a named list of specific individuals, with an obligation to make reasonable inquiry of key staff before signing, is narrower and more protective of the buyer than a vague reference to "the seller's knowledge" with no defined inquiry standard at all.

Buyers generally want knowledge qualifiers minimized or absent on the representations that matter most to them; sellers want them wherever real uncertainty exists. Understanding exactly what a specific knowledge qualifier commits your side to — and pushing back where it's too loose or too tight — is worth a careful read before signing, ideally with a Treadstone business lawyer.