Warranties and representations — why it matters

In Sycamore Bidco Ltd v Breslin, the High Court considered whether express warranties in a share sale agreement could also found an action for misrepresentation. Following completion of a share acquisition, the buyer discovered what it considered to be accounting errors in the pre-transaction audited accounts on which it had relied when agreeing the price for the target company.

The share purchase agreement contained warranties relating to those accounts. The buyer sued for breach of warranties and sought damages for misrepresentation on the basis that those warranties were also false representations which had induced it to buy the target company.

Perhaps the most important distinction between warranties and representations is the basis on which damages are measured. A warranty is a contractual statement or assurance given that a certain state of affairs exists. If the warranty is not true, the buyer may have a claim for breach of contract, the remedy for which is damages calculated on the basis of putting the claimant into the position it would have occupied if the warranty had been performed…

If you are registered and logged in to the site, click on the link below to read the rest of the Shoosmiths briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in

Register

It's quick, easy and free!

It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.

Register now

Why register to The Lawyer

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.

More relevant to you

To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.

Briefings from Shoosmiths

View more briefings from Shoosmiths

Analysis from The Lawyer

  • Hester: declined bonus worth almost £1m

    Pay checks

    Compliance and corporate governance codes for large financial institutions will undoubtedly include provisions to regulate high pay in the future

  • high street 150

    Focus: Alternative business structures - Law and new order

    There’s more to the ABS model than attracting the man in the street and procuring external investment. Partners at the big corporate firms, take note…

Overview

2 Colmore Square
38 Colmore Circus Queensway
Birmingham
B4 6BJ
UK
http://www.shoosmiths.co.uk

Turnover (£m): 92.98
No. of lawyers: 393