Claims of fraud and breach of warranty are common following the purchase of a business. They often mix tort and breach of contract and may involve specialist aspects such as notification provisions and escrow mechanisms.
Fraud and Breach of Warranty: Buyers’ Claims’ and Sellers’ Defences provides a practitioner’s guide to these claims from a leading commercial QC with great experience in this field.
Key questions to be considered include:
1. When can a warranty also be a representation? Cases include Idemitsu Kosan v Sumitomo  2 CLC 297
2. When is a warranty claim properly notified and served? Cases to be considered include Nobahar-Cookson v Hut Group  EWCA Civ 128 and Teoco v Aircom Jersey 4 Ltd  EWCA Civ 23
3. When is has fair disclosure been given? Cases include New Hearts v Cosmopolitan Investments  2 BCLC 249, Infiniteland v Artisan Contracting  1 BCLC 632
4. What are the requirements for proving fraud in the context of sale of a business? Cases include Belfairs v Sutherland  EWHC 2276 (Ch)
5. When is an accounting fraud attributed to the seller? Cases include Man v Freightliner  EWHC 2347 (Comm) and Hut Group v Nobahar-Cookson  EWHC 3842 (QB)
6. What are the remedies for fraud and breach of warranty and how are damages calculated? Cases include Lion Nathan v CC Bottlers  1 WLR 1438, Senate Electrical v Alcatel Submarine  2 Lloyd’s Rep 423
7. When can the seller claim for loss of earnout under purchaser’s warranties? Cases include Porton v 3M  EWHC 2895 (Comm) and Kitcatt v MMS  2 BCLC 352