Jargon Buster

Warranties & Indemnities:

These are sought by the purchaser of shares in a limited company and the purchaser of a business and involve the seller warranting the accuracy of information supplied. Breach of warranty lays the seller open to a claim for damages. If the warranty is also described as an indemnity, the seller agrees to pay for loss caused on a pound for pound basis, without the seller having to actually prove the extent of the damage suffered.