How can you mitigate risks when purchasing a business? The power of warranties
In this video, I explain the power of a warranty. What can go wrong when you don’t get it right? How to have the best set of warranties to protect your business investment.
If you have any questions, remember we've got a lot of experience with drafting and negotiating warranties. We can help you prepare a set of warranties that will protect you.
VIDEO TRANSCRIPT
Ross Millen
Hi. The other week I was talking about restraints that you might find in a sale of shares or a sale of a business agreement. Today I want to talk about something that's also as important, that's warranties. Warranties are like promises that the seller makes about what they're selling. That they own it, there's no unusual encumbrances, there's nothing going to jump out of the woodwork and cause you a loss. Well we had a client come to see us just the other week, and they had purchased a company and what they found were there certain liabilities within that company for pre-sales and things like that, that were not disclosed to them, and they only found out much later. So they didn't have proper warranties or the warranties had expired, so they had to bear that loss themselves and they couldn't get any claim against the vendor. So that's something to avoid.
I mean, we can advise about whether a warranty should be absolute or to the best of someone's knowledge. We can also say whether the small immaterial losses can be ignored or what time period you can claim for. So remember to make sure you're fully protected, both as a vendor and as a purchaser. If you are buying or selling a business or a company or some shares in a company, you need a good agreement and you need the right warranties. Now we've got a lot of experience with drafting and negotiating warranties. So if you've got any questions, don't make a mistake, don't find that you're going to incur a whole lot of losses that you can't recover. Contact us, I'm Ross Millen at Millens, and we can help you get the best set of warranties that you need for your commercial agreement.
