A ‘no litigation’ condition precedent means that the transaction will not be completed if there are any outstanding claims as listed in the clause. Claims (litigation) can cost a great deal of money, especially if a business loses the case in court. These losses can have a significant negative effect on a business. Purchasers of businesses want some assurance that there are no outstanding claims against the corporation that will have a negative effect on the business if the claim is decided against the corporation. Purchasers who wish to purchase the shares of a corporation also want assurance that there is no known litigation that could make it impossible for the purchaser to buy the shares or keep the shares once they have been purchased.