Fraud and Breach of Warranty : Buyers’ Claims and Sellers’ Defences

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. This new title provides a practitioner's guide to claims of fraud and breach of warranty 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 [2016] 2 CLC 2972. When is a warranty claim properly notified and served? Cases to be considered include Nobahar-Cookson v Hut Group [2016] EWCA Civ 128 and Teoco v Aircom Jersey 4 Ltd [2018] EWCA Civ 233. When is has fair disclosure been given? Cases include New Hearts v Cosmopolitan Investments [1997] 2 BCLC 249, Infiniteland v Artisan Contracting [2006] 1 BCLC 6324. What are the requirements for proving fraud in the context of sale of a business? Cases include Belfairs v Sutherland [2010] EWHC 2276 (Ch)5. When is an accounting fraud attributed to the seller? Cases include Man v Freightliner [2005] EWHC 2347 (Comm) and Hut Group v Nobahar-Cookson [2014] 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 [1996] 1 WLR 1438, Senate Electrical v Alcatel Submarine [1999] 2 Lloyd's Rep 4237. When can the seller claim for loss of earnout under purchaser's warranties? Cases include Porton v 3M [2011] EWHC 2895 (Comm) and Kitcatt v MMS [2017] 2 BCLC 352This title is included in Bloomsbury Professional's Company and Commercial Law online service. Preface Dedication Contents Table of Cases Table of Statutes Table of Statutory Instruments Chapter 1 Introduction Why this book? The parties The Contract Other topics Chapter 2 Warranties and Indemnities and their Breach Warranties and indemnities generally Particular types of warranty and indemnity Chapter 3 Excluding or Limiting Liability General considerations Entire agreement clauses Clauses excluding or restricting liability for misrepresentation Limitation of damages clauses The test of reasonableness in the business sale context Chapter 4 Knowledge and Disclosure Relevance of the seller's knowledge Relevance of the buyer's knowledge Chapter 5 Notification of claims clauses Introduction to notification clauses Construction of notification clauses and notices – general principles Construction of notification clauses and notices – specific issues Burden of Proof of compliance with notification requirements Application to misrepresentation claims Chapter 6 Escrow and Earnout Provisions Introduction to escrow and earnout provisions Escrow provisions Earnout provisions Chapter 7 Misrepresentation and Fraud Varieties of misrepresentation Negligent misstatement Deceit The misrepresentation Act 1967 Other tort claims based on misrepresentation Chapter 8 Damages General points about damages Damages for breach of warranty Damages for deceit Damages for negligent misstatement and damages under the misrepresentation act 1967 Chapter 9 Other Remedies Rescission Termination Frustration and force majeure Chapter 10 Sellers’ Claims Introduction to Sellers’ Claims Payment of purchase consideration Loss of earnout Breach of warranty unrelated to earnout Fraud claims Other potential claims against the buyer Contribution claims Chapter 11 Litigation Issues Introduction Pleading Claims Freezing injunctions Split trial Disclosure Witness evidence Expert evidence Limitation Parties Other recourse Costs Index 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. This new title provides a practitioner's guide to claims of fraud and breach of warranty 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 [2016] 2 CLC 297 2. When is a warranty claim properly notified and served? Cases to be considered include Nobahar-Cookson v Hut Group [2016] EWCA Civ 128 and Teoco v Aircom Jersey 4 Ltd [2018] EWCA Civ 23 3. When is has fair disclosure been given? Cases include New Hearts v Cosmopolitan Investments [1997] 2 BCLC 249, Infiniteland v Artisan Contracting [2006] 1 BCLC 632 4. What are the requirements for proving fraud in the context of sale of a business? Cases include Belfairs v Sutherland [2010] EWHC 2276 (Ch) 5. When is an accounting fraud attributed to the seller? Cases include Man v Freightliner [2005] EWHC 2347 (Comm) and Hut Group v Nobahar-Cookson [2014] 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 [1996] 1 WLR 1438, Senate Electrical v Alcatel Submarine [1999] 2 Lloyd's Rep 423 7. When can the seller claim for loss of earnout under purchaser's warranties? Cases include Porton v 3M [2011] EWHC 2895 (Comm) and Kitcatt v MMS [2017] 2 BCLC 352