Goodwill Hunting

In the case of Primus International Holding Co v Triumph Controls – UK Ltd¹, the courts were left searching for the most appropriate definition of "goodwill" when considering a breach of warranty claim.

Background:

• Primus (the seller) and Triumph (the buyer) entered into a share purchase agreement (SPA) in 2013 for the sale of two aerospace manufacturing companies.

• In preparation of the sale, the seller produced financial forecasts projecting that, although loss-making at the time of the sale, the companies would be profitable in the future. The parties agreed the purchase price for the companies based on those forecasts and, under the SPA, the seller provided a warranty that, as far as it was aware, the forecasts had been "honestly and carefully prepared".