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Warranties & Indemnities in the sale of a Business

What are warranties and do you require one?

Warranties are statements given by sellers which detail the condition and other aspects of their business and should also highlight if the company has any liabilities. Warranties give legal protection to buyers, who can take action if they find the information given to them was inaccurate.

At Business Lawyers Direct we help sellers restrict warranties for their protection, and we also help buyers to broaden the warranties to give them as much security as possible.

Warranties generally include the following information:

  • Details of accounts
  • Assets
  • Contracts
  • Details of property owned by a firm
  • Information about staff

Warranties are often accompanied by a disclosure letter in which any information is qualified, and we can offer assistance in drafting or interpreting disclosure letters.

Other considerations

Those seeking corporate disposal warranties may also find they need to look into indemnities. Indemnities are put together by a business seller and are designed to deal with a specific potential legal liability for which a buyer might otherwise be responsible following a sale.

It is important to be aware of the difference between a warranty and an indemnity. A warranty is a contractual statement made by the seller regarding the state of the target business and an indemnity is a promise to reimburse the purchaser in respect of a specific liability if it arises.

Limiting liability

Our commercial solicitors can assist vendors in limiting their liability and we can guide clients through this often complex process, giving easy to follow, jargon-free advice. You will always deal directly with a senior solicitor, so you will always have our years of experience working for you.

Contact us

Call Business Lawyers Direct today on or contact us via our online enquiry form and one of our senior solicitors will be pleased to discuss your requirements.

Business Lawyers Direct is a division of A.S. Matthews Limited which is authorised and regulated by the Solicitors Regulation Authority (561754). Registered office: 136 Park Lane, Whitefield, Manchester, M45 7PX. Company No: 7643746. VAT No: 116572715. Director: Andrew H. Kormornick.
Any reference to partner in relation to a firm means a director of the Company or an employee or consultant of equivalent standing and qualification.