A seller signed a share sale and purchase agreement (SPA) to sell shares in two companies.

Before completion of the SPA, he found out that sales to two of the companies’ major customers were declining.

Should he inform the buyer, or not?

He chose not to inform the buyer.

In the SPA, he had already warranted that:

·  the business of the companies had not been materially and adversely affected by the loss of any important client, and that he was not aware of any facts likely to give rise to such loss.

·  he did not know of any undisclosed fact that might reasonably affect the willingness of the buyer to proceed to completion.

By the terms of the SPA, these warranties were given at the time of signing of the SPA and repeated as at the date of completion.

The High Court found that his silence amounted to a breach of both warranties – 𝘚𝘢𝘵𝘪𝘯 𝘚𝘵𝘳𝘢𝘪𝘵𝘴 𝘚𝘥𝘯 𝘉𝘩𝘥 𝘷 𝘚𝘦𝘯𝘨 𝘚𝘢𝘯 𝘉𝘪𝘯𝘨.

If you are selling a business

Before you sign, and again before completion, read through the warranties in the SPA carefully. If you are aware of anything that is inconsistent with what you are about to warrant or have already warranted, discuss with your lawyer whether it needs to be disclosed.

This post was first posted on LinkedIn on 14 June 2026.