Warranties

Warranties often form an extensive schedule within the share purchase agreement, with claims limited by time, monetary thresholds, and caps. Time limits typically range from two to three years for general warranties and up to six years for tax-related claims. Liability caps often equate to the purchase price, and minimum claim thresholds prevent trivial disputes.

Sellers may secure warranty obligations through escrow accounts, deferred payments, or guarantees. Disclosure letters mitigate warranty liabilities by highlighting known issues. Indemnities address identified risks, such as tax liabilities or litigation, ensuring full recovery for the buyer. Buyers may also seek confirmation of full disclosure but face resistance from sellers due to its broad scope. Warranties and indemnities collectively balance the risk allocation, facilitating fair transactions while safeguarding buyers’ interests.

Read a detailed Article on this subject with the Legislation and Cases, browse Irish Legal Guide  or Contact Us for advice below.