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Before you claim: 6 key considerations for a breach of a Share Purchase Agreement
October 28, 2025
By Tiegan James
When agreeing and signing a Share Purchase Agreement (SPA), it is important that both the seller and buyer are aware of the obligations and warranties under the SPA in order to avoid confusion or conflict down the road.
A warranty is a contractual statement that sellers give to the buyers to confirm the details of the deal and expectations of the purchase.
Should a seller warrant something that later turns out to be incorrect or misleading, it can lead to a contractual claim for a breach of warranty arising.
Our commercial disputes expert, Tiegan James, has broken it down, sharing 6 key things to consider as a buyer, if you suspect a breach of warranty has occurred:
When bringing a claim for breach of warranty, it is important to be clear which warranty or warranties have allegedly been breached and how. This should be given clear thought as it will form the basis of the claim.
Warranties are also typically given subject to a disclosure letter, which allows the sellers to notify you of any particular issues they are aware of. It is therefore important to confirm that the alleged warranty breach is not already caveated by the disclosure letter.
The SPA may also provide a time limit for notifying the seller of any breach of warranty claims and/or bringing formal legal proceedings. This will typically shorten the statutory limitation period for breach of contract claims (6 years) to a significantly shorter time frame, for example one year from the completion date.
Missing a deadline can mean losing the right to claim entirely, so it is crucial to act quickly and efficiently.
The SPA will typically provide notification provisions which should always be followed when notifying sellers of a breach of warranty. If there is more than one seller, there may be a nominated representative who should be notified on behalf of all the sellers.
There may also be a specified method of service, or agreed methods of service which should be followed to ensure the validity of the notification.
When notifying the sellers of the breach, it is important that reasonable detail is provided, including which specific warranty or warranties you believe have been breached and the reasons why. This allows the seller to fully consider the position and potentially enable settlement discussions or early resolution to occur.
When bringing a breach of warranty claim, losses should be assessed following the normal principle of compensatory damages – meaning you, as the buyer, are put into the position you would have been in had the warranties given by the sellers been accurate. In serious cases, this may include the difference between the actual and potential market value of the company.
It is also worth noting that some SPAs have restrictions in place on the minimum value of the claim that can be brought to prevent disputes of low value.
Should the breach of warranty be so severe that the sale would not have been completed if you had been given the correct information, there may also be a claim under “negligent misstatement”. However, this would have the effect of avoiding the sale. It is therefore worth considering if it would be more appropriate for the whole sale to be voided or if financial compensation is being sought.
Expert legal support
If you believe there has been a breach of warranty of an SPA, it is always recommended to take legal advice as soon as possible.
Our specialist disputes team at Darwin Gray has years of experience in navigating breach of warranty claims, and our experts will be able to guide you through the options and provide you with the clear advice you need.
For bespoke advice, get in touch using our contact form, or via 029 2082 9100 for a free initial chat to see how our team can support you and your business.
To speak to one of our experts today, please contact us on 02920 829 100 or by using our Contact Us form for a free initial chat to see how we can help.
