Buying or selling a business is exciting, but it’s also stressful. There’s pressure to move quickly, documents flying around, and a natural urge to “just get the deal done”. Most people don’t want to get bogged down in the fine print of a sale and purchase agreement (SPA). But that fine print protects you if something later turns out not to be as promised - especially if you ever need to bring a breach of warranty claim.
A recent High Court decision - Veranova Bidco LP v Johnson Matthey Plc - shows why the wording of the SPA matters so much. The case involved the sale of a pharmaceutical business. On the face of it, the buyer appeared to have a strong complaint: a warranty was wrong, and the seller’s disclosure lacked the detail the buyer needed.
Yet the buyer still lost.
And the reason why is something every buyer and seller should understand.
The SPA included a warranty confirming that no key contract was undergoing renegotiation in a way that would harm the business. In reality, the target’s biggest customer triggered a price‑match clause after receiving a much cheaper competing offer. The court concluded that this situation breached the warranty. The judge also held that the seller’s disclosure lacked the clarity required to qualify as proper disclosure.
Up to this point, everything looked straightforward.
However, the SPA also stated that the buyer could only bring a warranty claim if the seller had acted fraudulently. That is an extremely high threshold. It’s not enough to show the warranty was wrong. It’s not enough to show the seller should have known. The buyer must prove actual dishonesty by a specific individual.
The buyer argued that different executives each held different pieces of relevant information and that the court should combine their knowledge. The court rejected that argument. It ruled that you cannot “aggregate” innocent knowledge from different people to create fraud.
So even though the warranty was false, and even though disclosure was inadequate, the buyer still had no breach of warranty claim.
It feels counter‑intuitive - even unfair - but it’s a reminder that the precise wording of a contract is key.
When you’re in the middle of a deal, it’s easy to:
But Veranova shows how risky that mindset can be.
A warranty can be breached. Disclosure can be inadequate. And you can still have no remedy - simply because of how the SPA is drafted. That's why understanding how a breach of warranty claim actually works in practice is so important.
If you want to understand how warranty notices must be drafted and served, see our guide on providing a valid notice of warranty claim under a share purchase agreement.
Once you sign the agreement, you accept its terms. You cannot renegotiate the protections you wish you’d insisted on.
Taking a case like this to trial is always a gamble. Even strong‑looking claims can fall apart once the court applies the exact wording of the contract. That’s why good litigators spend most of their time keeping clients out of the courtroom, not pushing them into it.
The best protection isn’t litigation. It’s getting the SPA right at the start.
If you’re buying or selling a business:
The pressure to complete is real - but overlooking key terms can leave you with no comeback at all, even when you think you have a clear and obvious breach of warranty claim.
Legal disclaimer
The matters contained within this article are intended to be for general information purposes only. This blog does not constitute legal advice, nor is it a complete or authoritative statement of the law in England and Wales and should not be treated as such.
Whilst every effort is made to ensure that the information is correct, no warranty, either express or implied, is given as to its’ accuracy, and no liability is accepted for any errors or omissions.
Before acting on any of the information contained in this blog, expert advice should always be sought.
© Melissa Worth, June 2026