This case report is now 0 months old and may not represent current law.
How much detail does a warranty claim notice need? Enough to describe the particular breaches the buyer is complaining about and the amount claimed, because a notice which covers some breaches won’t usually stretch to cover others that the buyer finds later. That was the outcome in SCRP Fund I Finance SARL v Robson [2026] EWHC 2477 (Comm), a first instance decision of the Circuit Commercial Court in Newcastle handed down on 6 October 2026, where a claimant which had served a detailed notice inside the time limit was refused permission to add further breaches to its claim two years on.
Most people who sell a business assume that once the warranty period has run out they’re in the clear, and most buyers assume that a solicitor’s letter sent in time protects their position generally. Both are only partly right, and this case shows why.
What happened
The sellers sold the shares in a group of five training companies under a share purchase agreement dated 28 September 2022. It was a management buy-out, with the buyer being a new company set up for the deal and funded by a lender. The buyer’s rights under the agreement were assigned to the lender as part of its security, and when the buyer went into administration in June 2024 it was the lender which pursued the warranty claim against the sellers. (If you’re selling to a funded buyer, it’s worth knowing that the party which ends up suing on the warranties may be the buyer’s funder, which you have never dealt with.)
The agreement had the usual limits on the sellers’ liability. A warranty claim could only be brought if notice had been given within 24 months of completion, and the notice had to specify “in reasonable detail the circumstances which give rise to the claim, the breach that results and the amount claimed”. There was also the usual exception, so that none of the limits applied to fraud or deliberate non-disclosure by the sellers.
The lender’s solicitors sent a claim letter on 9 April 2024, inside the 24 months, and a claim was issued in October 2024 about one of the five companies. It was listed for a ten day trial starting on 26 October 2026. Then, in the summer of 2026, the lender applied to amend its claim in two ways. It wanted to add further alleged inaccuracies in the accounts, which it said had led to the group being overvalued, and it wanted to allege that certain payments made by the group before the sale were bribes and that one of the sellers had made fraudulent misrepresentations about them.
The notice only covered the breaches it described
The April 2024 letter was a detailed one, in that it identified the accounts warranties, gave a number of specific examples of alleged inaccuracies and put a value on the claim. The additional inaccuracies which the lender wanted to add in 2026 weren’t mentioned in it, and by then the 24 months had long gone. I’ve written before about what a notice has to say to be valid in the first place; the problem here was a notice which was good for the breaches in it being asked to cover others.
The lender argued that the letter’s general statement that the accounts warranties had been breached was enough to cover the new points. The judge disagreed. She held that it wasn’t possible to read into the generalities of the letter enough detail to satisfy the agreement, when neither the facts now relied on nor the losses claimed for them were in it, and so that part of the amendment had no realistic prospect of success.
For a buyer, this means a claim notice only protects the breaches it describes. If you suspect there are other problems, they need to be investigated and put in the notice (or in a further notice) before the deadline. For a seller, it shows that the notice clause in the limitations schedule matters in practice and is worth the time spent negotiating it.
I should say that this was a decision about one particular clause, made on an application to amend and not after a trial, so an agreement with different wording could produce a different answer. It also needs to be read alongside the Court of Appeal’s decision in Drax Smart Generation Holdco Ltd v Scottish Power Retail Holdings Ltd [2024] EWCA Civ 477, which I’ve written about separately and where a buyer was allowed to change the way it calculated its loss after the notice had gone. The two fit together, as in Drax the seller had been told what the complaint was, whereas here the sellers hadn’t been told about the new breaches at all.
The fraud allegations came too late
Fraud matters in a warranty claim because the time limits and caps almost always fall away if the seller has been fraudulent, as they did under this agreement (I’ve written separately about what the fraud exception does to a seller’s limits). The sellers’ side suggested that this was why a fraud case had appeared once the time limits had become a problem.
The judge refused permission for these amendments as well. She was prepared to assume that the fraud case was arguable, but was “wholly unpersuaded” that it was a strong one, as there were other explanations for the payments, no evidence that they were excessive or lacked a legitimate business reason, and the accountants who went through the group’s accounts during due diligence hadn’t queried them. The court wasn’t deciding whether the allegations were true, and nothing was found against the sellers.
She would have refused in any event because of the timing. Allowing the amendments would have meant losing the trial date, and the lender’s explanation (that it only found the documents after a wider search in 2026) didn’t help, as it had held nearly all of the relevant documents throughout and it was for the lender to investigate and prove its own case.
What the judgment doesn’t decide
There is a long-running argument about whether a warranty in a sale agreement can also be a representation, which would give a buyer a misrepresentation claim outside the contractual limits. The sellers relied on cases such as Sycamore Bidco Ltd v Breslin [2012] EWHC 3443 (Ch) to say that it can’t, and the lender relied on cases such as Invertec Ltd v De Mol Holding BV [2009] EWHC 2471 (Ch) to say that it can. The judge noted that the first instance authorities conflict and didn’t need to choose between them.
The judgment also doesn’t deal with the original warranty claim, or with the sellers’ argument that they are owed further earn-out payments because of the way the business was run after completion. Both of those are for the trial, and costs aren’t covered either.
There is one further point for anyone involved in a buy-out. The judge noted that some of the statements complained about appeared to have been made by members of the management team, who were on the buyer’s side of the deal, and that the agreement had clauses dealing with what named managers knew at completion. In a buy-out the managers often know the business better than the seller does, so it’s common for the agreement to stop the buyer claiming for something those managers already knew about.
What to do if you’re selling or buying
If you’re selling, read the limitations schedule in your sale agreement as carefully as the price clause. Check that a claim notice has to give reasonable detail of the breach and the amount, that there is a deadline for giving it, and that there is a second deadline for starting court proceedings after it (here it was nine months). If a claim letter does arrive, keep it safe, because once the deadline has passed the breaches described in it will usually be the only ones which can be claimed for (although the amount claimed for them can change).
If you’re buying, put the warranty deadline in the diary on the day you complete and start reviewing the business well before it arrives. A notice needs facts and figures for each breach, so a general letter reserving your position is unlikely to be enough. If something new comes to light after you’ve served notice, deal with it before the deadline and don’t assume the first letter covers it.
I act for buyers and sellers on share purchase agreements, including negotiating the warranties and the limits on them, although warranty disputes themselves go to my Nexa colleagues who litigate them day to day. Get in touch if you need some help.
Written by Steven Mather, a business solicitor acting on company sales and purchases. This is general information about the law, not legal advice on your situation. Law correct as at .
