Jurisdiction(s):
United Kingdom

Related legal acts

Key definition

Warranty definition

What does Warranty mean? A warranty is a contractual promise that specified facts are true or that goods or services will meet stated standards. Lawyers use warranties to allocate risk and support due diligence, commonly in sale of goods, supply, real estate and M&A/share purchase agreements. In sale of goods law, “warranty” is defined by statute: Sale of Goods Act 1979 (England & Wales, Scotland and Northern Ireland) and the Sale of Goods Act 1893 as amended by the 1980 Act (Ireland) treat a warranty as a stipulation collateral to the contract’s main purpose. Breach of warranty gives a right to damages but not to...

SCPCs (Third Edition, 2018 Revision): Allocation of Risk, Physical Condition and Insurance between Exchange and Completion (England and Wales)

Published by a LexisNexis Property expert

Practice notes

This Practice Note examines how the Standard Commercial Property Conditions (Third Edition—2018 Revision) set out the parties’ respective responsibilities for the property’s physical state and for insurance during the period between exchange and Completion. For fuller guidance on negotiating provisions dealing with insurance and risk, see Practice Note: Buyer’s contract negotiation guide—insurance and risk.

When does risk pass to the buyer?

Under SCPC 8.1, risk transfers to the buyer on exchange of contracts, which mirrors the open contract position. From that point, the buyer becomes responsible for any loss or damage affecting the property.

Physical condition of the property

Save where the seller is constructing or converting the property, the seller gives no assurance regarding its physical condition. SCPC 4.2.1 reflects the principle of caveat emptor and places an obligation on the buyer to investigate and inspect. The buyer has no claim against the seller for defects that render the property unsuitable for its purpose unless the contract includes an express Warranty keeping the risk with the seller, or the seller has actively concealed physical defects that they knew about...

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Web page updated on 21/05/2026

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