Financial Warranty Breach Expert Witness UK

Financial warranties in a sale and purchase agreement warrant the accuracy of the target company's financial position. The most commonly disputed financial warranties include the accounts warranty, the no undisclosed liabilities warranty, management accounts warranties, and material contracts warranties.

A breach of the accounts warranty arises where financial statements did not give a true and fair view or were not prepared in accordance with applicable accounting standards. The no undisclosed liabilities warranty warrants that no material liabilities exist that are not reflected in the accounts.

Management accounts warranties warrant the accuracy and completeness of monthly management information provided during due diligence. Where management accounts presented a significantly more favourable position than subsequent audited accounts revealed, a breach claim may arise.

The expert witness establishes which warranty was breached, reconstructs the true financial position, and quantifies the diminution in value caused by the breach using appropriate valuation methodology.

Material adverse change warranties may also give rise to expert evidence requirements, though these are typically more fact-intensive and require assessment of whether a MAC event occurred and its financial impact.