Share purchase/ sale; warranties; disclosure letter

In this case the buyer of a conference and wedding venue obtained a warranty from the seller to the effect that all the company's contracts had been entered into in the ordinary course of business and were terminable by notice not exceeding four months.

The seller's disclosure letter said in response to this warranty that the company had approximately 150 - 200 wedding contracts.? (This was not a response, ie a qualification to the warranty given, but an entirely different point which the seller need not have made.)?


After completion the buyer found that there were only 87 wedding contracts and tried to sue for breach of warranty.? The court examined the share sale and purchase agreement and found that the sellers' solicitors had done well on the point when negotiating the contract.? The contract did not stipulate that the contents of the disclosure letter were themselves warranties.? The buyer's claim for breach of warranty was therefore dismissed.? Use an experienced solicitor.


Case: Highwater Estates v Evelyn Graybill 2009

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