Further Update On Claims Under Share Purchase Agreements

In August 2020, we highlighted a decision of the High Court in which the meaning of the phrase “as soon as possible” was examined in the context of claims made under a Sale and Purchase Agreement (SPA). From that case, we learnt that by imposing a secondary condition in the SPA that claims be made “as soon as possible”, a buyer cannot use the limitation period in the SPA as a back stop before bringing his claim against the seller. In other words, if the SPA stipulates that claims must be brought “on or before the seventh anniversary” and the buyer becomes aware of a potential claim in the year following completion, if the SPA requires that claims be made “as soon as possible”, then the buyer must give notice to the seller at the time he becomes aware of the matters or things giving rise to the potential claim. He does not have seven years in which to wait before bringing the claim.