Starting an SPA breach of warranty claim—a practical guide

The following Dispute Resolution practice note provides comprehensive and up to date legal information covering:

  • Starting an SPA breach of warranty claim—a practical guide
  • What is a breach of warranty claim?
  • What is an indemnity—warranty claim and/or claim under the indemnities?
  • Warranty claim—initial steps
  • Warranty claim—hypothetical scenario
  • Warranty claim—reviewing the warranty provisions
  • Warranty claim—serving notice of a warranty claim
  • When is the buyer aware?
  • Form and content of the notice
  • Service of the notice
  • More...

Starting an SPA breach of warranty claim—a practical guide

This Practice Note considers how to pursue a breach of warranty claim in the context of warranties provided in a sale and purchase agreement (SPA) (also known as a share sale agreement).

For the purposes of this Practice Note we refer throughout to a claim brought in respect of an SPA although you may apply the same general considerations in respect of a warranty claim arising out of an asset purchase agreement (APA). It highlights some of the most common features of this type of claim, but is no substitute for reviewing the contractual documentation relevant to your dispute thoroughly.

For a summary of the steps to take, see: Starting a breach of warranty claim—checklist.

What is a breach of warranty claim?

A warranty is a contractual statement or assurance given by a seller to a buyer that a certain state of affairs exists at a given point in time.

Per Andrew Baker QC in Indemitsu v Sumitomo, a claim arising out of a share sale and purchase agreement:

‘14. When a seller, by the terms of the contract under which he sells, “warrants” something about the subject matter sold, he is making a contractual promise. Nothing less. But also I think (and all things being equal) nothing more. That is so just as much for a warranty as to some then

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