Checkmate – managing post-acquisition disputes

• 3 June 2026
• News
• Commercial and corporate disputes

Parties buying and selling a business are generally focused on completing the deal and on their plans post-closing. While their lawyers will have advised on the transaction with a view to avoiding future disputes, this is unlikely to have been the main focus.

So what claims are typically made by buyers following a sale? And what are the priority issues for buyers and sellers if a dispute does arise?

This article forms part of our Checkmate – your essential guide to commercial disputes series, a collection of practical insights designed to help businesses navigate common dispute scenarios with clarity and confidence. Explore the full guide here.

Warranties

Many post-acquisition disputes concern breaches of warranties, a key feature of most sale and purchase agreements (SPAs).

A warranty is a contractual promise made by the seller to the buyer that a particular factual position exists in relation to the asset – i.e., the business – being sold. For example, the seller of a business commonly warrants that its accounts give a true and accurate picture of its financial position.

Warranties are necessary to provide buyers with protection given the default rule of “caveat emptor” or “buyer beware”, which places the risk of an asset failing to meet the buyer’s expectations on the buyer.

When a warranty is breached, a buyer is entitled to claim its loss from the seller. In this scenario, the law aims to put the buyer in the position that it would have been in if the warranty had not been breached. As such, the buyer is generally entitled to claim the difference between the value of the business that it actually acquired and the value that the business would have had if the warranty had been true.

Warranties are often qualified so that a seller is not liable for what would otherwise be an actionable breach:

• Where the fact which makes the warranty untrue has been “fairly disclosed” by the seller. What counts as fair disclosure depends on the wording of the SPA. However, the general idea is that the fact should have been meaningfully brought to the buyer’s attention, for example, by being specifically flagged in the disclosure letter provided by the seller – as opposed to simply being available in theory within one of the documents in the data room.
• Where the fact which makes the warranty untrue is within the knowledge of the buyer. What counts as knowledge again depends on the wording of the SPA. It can be restricted to actual knowledge – often that of specific individuals (for example, the buyer’s directors) – or extend to constructive knowledge i.e., where the buyer should know.

There is often overlap between fair disclosure and buyer knowledge. For example, a fact that has been fairly disclosed by the seller is likely to be within the actual or constructive knowledge of the buyer.

Indemnities

Post-acquisition disputes also often concern claims under indemnities, another key feature of most SPAs.

Whereas a warranty is a promise that a particular factual position exists, an indemnity is a promise to meet the buyer’s liabilities if a particular risk eventuates. For example, it is common in a business sale for the seller to indemnify the buyer in respect of any additional tax liability that may arise after the sale relating to the period beforehand.

The scope of the risks covered by an indemnity is determined by the contractual wording, though the Courts have given guidance regarding the meaning of particular words that are frequently used, for example, “costs”.

It is common for there to be overlap between the warranties and the indemnities in an SPA. For example, an indemnity in respect of tax liabilities is often accompanied by a warranty that the business has paid the correct tax. Often a buyer will wish to pursue breaches of both a warranty and an indemnity because each has different advantages and disadvantages. For example, an indemnity may be more obviously applicable to the facts than a warranty, but may also be subject to a cap when the warranty is not.

Notification of claims

Many SPAs provide that notice of any claim must be given within a prescribed period after completion (often a year or two).

A claim notice is also frequently required to meet particular form requirements (for example, to be sent in hard copy to a particular address) and to contain particular information (often a brief description of the background facts, the claim’s legal basis, the amount sought and the basis on which it is calculated). This seeks to ensure that the notice is directed to the appropriate individual and that they have enough information to assess the claim.

Meeting the above requirements is crucial: if a notice in the required form is not provided within the time limit, the claim is barred.

Priority issues if a dispute arises

If a potential claim is identified after closing, the following issues should be considered as a priority:

• Does the claim arguably fall within one of the warranties or indemnities? If not, this may not be fatal to the claim – but these are the likeliest route to liability.
• If a claim falls within one of the warranties, has the seller’s liability been qualified by relevant facts being fairly disclosed and/or within the buyer’s knowledge?
• What is the value of the claim? In particular, in warranty cases, how much more valuable – if at all – would the business have been if the warranty had been true? In indemnity cases, what losses fall within the terms of the indemnity?
• What are the form and content requirements for notifying a claim? Crucially, what is the time limit?

While the above considerations are not a substitute for detailed legal advice, they should provide a starting point when assessing many potential claims.

To find out more about our team, our expertise and how we can help you, please visit our Commercial Disputes page here.

This insight is one of a series of Checkmate articles exploring the core themes that underpin modern commercial disputes, from post-acquisition claims to shareholder conflicts and directors’ duties.

To access the full guide and build a broader understanding of the risks and strategic considerations across these areas, visit here.