Can a warranty also be a representation?

The High Court has recently considered whether express warranties in a share purchase agreement could also amount to representations by the sellers. The distinction is significant because a claim
for breach of warranty gives rise to a different remedy than a claim for misrepresentation. The point was considered in Sycamore Bidco Limited v Sean Breslin and Andrew Dawson [2012] EWHC 343 (Ch), a case involving the sale and purchase of the shares of an insurance broking company. 

The claim was brought by the buyer, Sycamore Bidco Limited, a company specifically formed for the acquisition of the target company. The majority shareholder in the buyer was a private equity firm while a minority stake was taken by a management buy-out (MBO) team. The MBO team was made up of certain directors and managers of the target company, all of whom became directors of the buyer before completion of the acquisition…

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