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Share Purchase Agreement Disputes: Breach of Warranty Claim Checklist


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Share Purchase Agreements (‘SPAs’) are key documents which govern the private sale and purchase of shares in a company. Inevitably, disputes arise in relation to the sale and purchase of shares, often revolving around breaches of warranties contained in the SPA, typically provided by the seller. 

Here, we delve into the practical considerations for breach of warranty in SPAs and provide a checklist on how to handle such disputes at an early stage of a breach of warranty claim. 

What is a Breach of Warranty in a Share Purchase Agreement? 

In the context of SPAs, warranties are assurances made by the seller regarding the accuracy and completeness of certain information and about the company being sold. A breach of warranty occurs when these assurances are found to be false or misleading, either at the time of sale or afterward. 

Common types of breaches of warranty may include: 

  • Financial Misrepresentations: where the seller inaccurately represents the financial health of the company, such as its revenue, profits, or liabilities. 
  • Legal Compliance: warranties may extend to compliance with applicable laws and regulations, breaches of which may occur if the company is found to be in breach of such applicable laws and regulations. 
  • Intellectual Property: the seller may warrant that the company owns all its intellectual property. However, if it is later discovered that this is not the case, the seller may be held to be in breach of warranty. 

Checklist for Navigating a Breach of Warranty Claim 

  1. Review the SPA: Carefully examine the SPA to understand the warranties made by the seller and consider which warranties have potentially been breached. The SPA will ultimately serve as the core reference point for the dispute. 
  1. Document the Breach: Collect any available evidence to support your claim for a breach of warranty, such as financial records and statements, correspondence, expert opinions, or legal documents. 
  1. Notification of Claim: The SPA will often provide a mechanism requiring one party to give notice to the other of any potential breach of warranty and/or its claim. The notice is often a strict precursor to a formal claim, whereby the SPA will prescribe precisely what must be contained in the notice and how the notice is to be served. For example: 
  • Where the notice is to be delivered e.g. is there a specific address;  
  • The time period of giving notice;   
  • How the notice is to be communicated e.g. by hand, email, fax, post etc.; and/or  
  • Whether there is any specific information to be included (often requiring you to provide as much detail of a potential breach as possible) 

    It is also important to document precisely when and how the notice was given to ensure that proof of service of the notice can be provided. 

    Getting this wrong could result in an invalid notice which may mean that making a claim for a breach of warranty is lost. 
  1. Limitation Period: Consider whether there is a prescribed deadline within the SPA governing the limitation period for you to bring a claim. Typically, under English Law, a claim for a breach of contract (including breach of warranty) is six years, unless signed as a deed, which may extend this deadline to twelve years. However, the SPA often stipulates a shorter contractual limitation period, typically 12-18 months. If this contractual period is missed, you will simply be out of time to make a claim. 

As a practical point, a buyer may wish to request its legal representatives to provide a schedule of limitation periods to ensure adherence to all potential deadlines. 

Oversights are common in the world of business, but many of the pitfalls in failing to adhere to the strict requirements of an SPA can be avoided. 

If you need advice or assistance in navigating disputes relating to share purchase agreements, whether a breach of warranty or otherwise, contact Partner Jonathan Chan at


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Jonathan Chan

Litigation Partner

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