Skip to main content
Book a call — £89
Menu

Breach of Warranty Dispute UK: Your Options

We're not a law firm — we help you find the right legal support. For advice on your situation, speak to a legal adviser or find a solicitor.

Part ofCommercial Disputes

Written by Brad Askew Solicitor (non-practising)
Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice.
Updated June 2026 · England & Wales
Warranties and indemnities sit quietly in most commercial contracts until something goes wrong. When a buyer discovers the business they acquired was not quite what was promised, or a supplier fails to meet the assurances baked into their agreement, those clauses suddenly matter a great deal. A breach of warranty dispute can be technical, expensive, and emotionally charged, particularly when significant sums or reputations are at stake. This guide walks through how warranty claims work in commercial contracts under the law of England and Wales, what you need to prove, how losses are calculated, and the routes available to resolve matters without burning through more money than the dispute is worth. If you are weighing up whether to bring or defend a claim, understanding the landscape early tends to lead to better outcomes.

What this document is

A commercial warranty is a contractual promise that a particular fact or state of affairs is true. Sellers of businesses, software vendors, manufacturers, and service providers all routinely give warranties as part of their agreements. If the promise turns out to be false, the party that relied on it can claim damages for breach of contract, putting them back in the position they would have been in had the warranty been accurate.

An indemnity is different in character. It is a direct promise to cover a specific type of loss if a defined event occurs, and it often allows the injured party to recover pound for pound without having to prove the usual contractual measure of loss.

Warranty and indemnity disputes typically arise after share purchases, asset sales, supply agreements, franchise deals, and technology contracts. The drafting of the clause, the time limits for notifying claims, any financial caps, and the evidence available will all shape whether a claim is worth pursuing and what it is realistically worth.

How to use this document

  1. Read the contract carefully. Pull out the warranty or indemnity clause and look at exactly what was promised, who promised it, and any qualifications such as knowledge caveats or disclosure provisions. Check the notification requirements, time limits, and any financial caps or baskets that limit liability. The wording shapes everything that follows.
  2. Gather the evidence. Assemble documents, correspondence, accounts, due diligence materials, and any expert reports that show the warranty was inaccurate and that you have suffered loss as a result. Contemporaneous records are usually more persuasive than recollections, so collect emails, board papers, and financial data before anything is lost or overwritten.
  3. Notify the other side in line with the contract. Most commercial agreements set out strict rules for how a warranty claim must be notified, including who it goes to, what the notice must say, and the deadline. Missing a notification window can kill an otherwise strong claim, so diary the dates and draft the notice with care.
  4. Quantify your losses properly. Work out the financial impact of the breach using the measure the contract requires. For warranty claims this is usually the difference between the value of what you received and the value it would have had if the warranty were true. For indemnities, you typically recover the defined loss directly. Get accounting or valuation input where the numbers are material.
  5. Explore resolution routes. Before issuing court proceedings, consider negotiation, mediation, or expert determination if the contract provides for it. Many commercial contracts contain dispute resolution clauses requiring specific steps before litigation. Resolving matters out of court is usually faster, cheaper, and keeps the dispute confidential, which matters when reputations are in play.

Common questions

If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Common questions

Q What is the difference between a warranty and an indemnity?
A warranty is a contractual statement that something is true, and if it is not, you claim damages for breach of contract using the usual contractual measure of loss. An indemnity is a promise to cover a specific type of loss if a defined event happens, usually pound for pound. Indemnities tend to be easier to recover under because you do not need to prove the same elements, but they are also negotiated more tightly.
Q How long do I have to bring a warranty claim?
Two sets of time limits typically apply. First, the contract itself will usually set a notification period, often somewhere between one and three years after completion for general warranties and longer for tax warranties. Second, statutory limitation rules apply, generally six years for simple contracts and twelve for deeds. The shorter of the two governs, so check the contract first.
Q Can I recover legal costs if I win a warranty dispute?
In commercial litigation in England and Wales, the general rule is that the losing party pays a proportion of the winning party's legal costs, but rarely the full amount. Recovery is usually assessed by the court and can be significantly less than what you actually spent. Some contracts include specific costs provisions, so it is worth checking what the agreement says about costs recovery.
Q What if the contract has a liability cap?
Many commercial agreements cap the total liability for warranty claims, often at a percentage of the purchase price or contract value. This means even if your losses are larger, your recovery is limited to the cap. Some categories, such as fraud or breach of title warranties, are usually carved out of the cap, so review the exclusions carefully before deciding whether to bring a claim.
Q Do I have to mitigate my losses?
For warranty claims, yes. The injured party is generally expected to take reasonable steps to reduce their loss, and damages can be reduced if they do not. For indemnity claims, the position is often different because indemnities are designed to cover loss directly without the usual mitigation requirement, though this depends heavily on how the clause is drafted.
Q Is mediation worth trying before going to court?
Usually yes. Mediation is quicker, cheaper, and confidential, and it allows commercial solutions that a court cannot order, such as ongoing trading arrangements or adjusted payment terms. Courts expect parties to consider alternative dispute resolution, and unreasonable refusal to mediate can have costs consequences. Most commercial warranty disputes settle before trial, often at mediation.
Q What evidence do I need to prove a breach of warranty?
You need to show what the warranty promised, how the reality differed, and the financial impact of that difference. Documentary evidence is usually decisive, including the contract, any disclosure letter, due diligence materials, financial records, and correspondence. Expert evidence may be needed for technical issues or valuation. The stronger the paper trail, the better your prospects.
If you're dealing with this kind of situation, speak to an experienced legal adviser who can walk you through it — from £149.

Sources

This guide is based on primary UK law and official guidance.

Brad Askew, Solicitor (non-practising)

Written & reviewed by

Brad Askew Solicitor (non-practising)

Brad is on the roll of solicitors of England & Wales but does not hold a practising certificate and does not provide legal advice. LegalDocuments.co.uk is not a law firm and does not provide regulated legal advice.

Full profile →SRA register ↗
Legal disclaimer
This article is for general information only. It is a tool to help you find your way — not legal advice, and not a substitute for speaking to a qualified adviser about your situation.