Jurisdiction(s):
United Kingdom

Key definition

Back to back warranties definition

What does Back to back warranties mean? In practice, back-to-back warranties describe warranty protection that is mirrored across an initial acquisition and a planned onward sale of the target company or business, so the intermediate buyer is protected on both transactions and can pass any warranty claim up the chain. The term is descriptive (not defined by statute or case law) and is used consistently across England & Wales, Scotland, Northern Ireland and Ireland in M&A and group reorganisations. Key features typically include: (1) the onward SPA/APA contains warranties that are identical (or no less favourable) to those in the initial SPA/APA, including knowledge qualifiers,...

Back-to-back warranties on onward share sale: SPA clauses preventing seller defences and allowing resale warranty losses to be claimed as share value diminution

Published by a LexisNexis Corporate expert

Precedents

8 Warranties

8.14 The Seller acknowledges that:

following Completion, the Buyer plans to transfer [ all OR some of ] the Sale Shares (the Resale Transaction) to a member of the Buyer’s Group or a third party (the Resale Buyer);
under the Resale Transaction, the Resale Buyer will, among other matters, rely on warranties given by the Buyer (the Resale Warranties); and
the Resale Warranties will be in the same form as those in Schedule [ 4 OR [ insert number for warranties schedule ] ].

8.15 The Seller agrees that:

if, after a Resale Transaction, the Buyer makes a Warranty Claim, the Seller will not dispute it because the Buyer entered into the Resale Transaction or gave the Resale Warranties, nor argue that the measure of damages or the form of relief is affected or reduced as a result; and
the Buyer may treat or attribute any loss or damage it suffers due to a claim by the Resale Buyer under the Resale Warranties as a reduction in the value of the Sale Shares when bringing any Warranty Claims...

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Web page updated on 22/05/2026

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