---
title: "AI systems and data warranties and indemnities for a share or asset sale agreement"
url: "https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/ai-and-data-warranties-sale-agreement"
type: "precedent"
site: "AI Law Framework"
id: "a2-ai-and-data-warranties-sale-agreement"
area_id: "A2"
kind: "clause"
ai_level: "yellow"
version: 1
law_stated_as_at: "2026-10-17"
---

# AI systems and data warranties and indemnities for a share or asset sale agreement

> Buyer-side warranty schedule and specific indemnity on the target’s AI systems, training data, privacy compliance, data breaches, automated decisions and EU AI Act exposure, with seller-side fallback positions.

Canonical page: https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/ai-and-data-warranties-sale-agreement  
Law stated as at: 2026-10-17

Site index for agents: https://ailawframework.com/llms.txt

## Key facts

- Kind: Clause. Wording to drop into a longer document.
- Practice area: [Mergers & Acquisitions / Private Equity](https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity.md)
- Jurisdictions: Australia, European Union, United Kingdom (England and Wales)
- AI level: Yellow. AI can help in set ways. A lawyer checks specific points before use.
- Law stated as at: 2026-10-17
- Status: Maintained. Checked on 2026-10-17 against the 5 authorities it cites, for Australia, European Union and United Kingdom (England and Wales).

## When to use it

Use in share or asset sale agreements where the target develops, uses or sells AI systems or relies heavily on data. Scale back for targets with only incidental use of standard AI tools. Check W&I insurance exclusions before relying on these warranties.

## How AI may be used

AI may map warranties to due diligence findings and draft fallback positions. The disclosure against warranties and the indemnity package are settled by a lawyer.

**AI may:**

- Map each warranty to the due diligence findings and documents that bear on it
- Draft seller-side fallback wording for each warranty
- Check defined terms against the sale agreement

**AI must not:**

- Must not decide which issues should be covered by a specific indemnity
- Must not assess whether the target’s AI systems are high-risk under the EU AI Act
- Must not process the target’s source code or training data in an unapproved tool

**The lawyer checks:**

- Warranties align with the due diligence findings and the disclosure letter
- Limitations (caps, time limits, de minimis) and W&I policy exclusions considered
- EU AI Act analysis done by a person qualified to give it, if the target operates in the EU

## Authorities

- [Privacy Act 1988 (Cth) Sch 1, APPs 1, 6, 8 and 11; s 26WE (eligible data breach)](https://www.legislation.gov.au/C2004A03712/latest/text)
- [Privacy and Other Legislation Amendment Act 2024 (Cth) Sch 1 Pt 15 (APP 1.7–1.9, from 10 December 2026)](https://www.legislation.gov.au/C2024A00128/asmade/text)
- [Copyright Act 1968 (Cth)](https://www.legislation.gov.au/C1968A00063/latest/text)
- [Regulation (EU) 2024/1689 (AI Act) arts 5, 6 and 26](https://eur-lex.europa.eu/eli/reg/2024/1689/oj/eng)
- [Regulation (EU) 2026/1744 (Digital Omnibus on AI) art 1 (amending AI Act art 113)](https://eur-lex.europa.eu/eli/reg/2026/1744/oj/eng)

## Full text and drafting notes

The full text and the drafting notes are not part of this public page. Signed-in firm accounts can read them at https://ailawframework.com/precedents/mergers-and-acquisitions-private-equity/ai-and-data-warranties-sale-agreement and through the signed-in MCP connector https://ailawframework.com/mcp/firm.

*Practice guidance for planning and review. Confirm current primary sources and the requirements of the actual matter. This is general information, not legal advice.*