In the acquisition context, "sandbagging" refers to a buyer who knows at signing that a representation and warranty is false, but instead of alerting the seller, consummates the transaction and seeks post-closing damages against the breach. Sandbagging is so pervasive that transactional planners may negotiate to include a clause in the agreement that either expressly allows or expressly prohibits the practice. Despite the opportunity for private ordering, agreements are often silent on the issue. In the absence of explicit contractual language, jurisdictions are split on the permissibility of sandbagging. In "pro-sandbagging" states, a buyer's pre-closing knowledge of a breach does not prevent her from bringing a successful claim for breach of warranty. In "anti-sandbagging" states, a buyer who knew (or should have known) that the warranty was untrue is barred from recovering on a claim for breach. See Jacek Jastrzebski, "Sandbagging and the Distinction Between Warranty Clauses and Contractual Indemnities," 19 U.C. Davis Bus. L.J. 207, 209 (2019).

Though "characterizing a state as pro-sandbagging or anti-sandbagging may not provide a complete description of the relevant case law," California, Maryland and Texas are treated as anti-sandbagging jurisdictions, while New York is treated as a pro-sandbagging state. See Charles K. Whitehead, "Sandbagging: Default Rules and Acquisition Agreements," 36 DEL. J. CORP. L. 1081, 1091 (2011).