Commentary

125 Limitations of liability based on parties’ knowledge

COMPANIES vol 11 acquisitions, mergers, demergers
| Commentary

125 Limitations of liability based on parties’ knowledge

| Commentary

125 Limitations of liability based on parties’ knowledge

The sellers may seek to limit or exclude liability by reference to the buyer’s pre-existing knowledge of the subject matter of the claim or by reference to their own lack of knowledge of the underlying facts. Where the sellers seek to rely on the buyer’s pre-existing knowledge, the main question is whether the buyer should be entitled to bring a claim under the warranties where he had actual knowledge of the subject matter of the claim at the date of exchange of contracts, although this was not disclosed in the disclosure letter.

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