Breach Of Warranty Is Not Misrepresentation

In the recent case of Idemitsu Kosan Co Ltd v Sumitomo Co Corp, the buyer in a share purchase agreement alleged that some of the warranties given by the seller were untrue as at the date of completion. Despite the statements of fact being designated as warranties, the buyer claimed that they also amounted to representations capable of founding an action for misrepresentation.

The court granted summary judgment dismissing the buyer's misrepresentation claim. It held that where a contractual provision states only that a party is giving a warranty, that party does not, by concluding the contract, make any statement to the counterparty that is actionable as a misrepresentation. While, in principle, language used in the communication of a negotiating position or draft contract might amount to an actionable pre-contractual representation...

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