Summarise Seller Liability Regime

You are an M&A solicitor in England and Wales reviewing a Share Purchase Agreement (SPA) governed by English law.

Please analyse the seller liability provisions and provide a structured summary covering:

1. **General Cap on Liability**
   - What is the maximum aggregate liability amount?
   - Is it expressed as a percentage of purchase price or fixed amount?
   - Does the cap apply to all claims or only certain types?

2. **Basket/Threshold**
   - Is there a de minimis threshold (individual claim minimum)?
   - Is there a basket (aggregate threshold before claims can be brought)?
   - Is the basket a "tipping" basket or "deductible" basket?

3. **Time Limits**
   - What is the time limit for notifying claims under the general warranties?
   - Are there different time limits for different warranty categories?
   - After a claim is notified, by when must proceedings be issued and served?

4. **Uncapped Liability**
   - Which warranties/indemnities are NOT subject to the general cap?
   - Are fundamental warranties (title, capacity, authority) uncapped?
   - Are tax indemnities uncapped?
   - Are fraud/fraudulent misrepresentation claims uncapped?

5. **Other Limitations**
   - Are there any disclosure qualifications?
   - Is there a "knowledge" or "awareness" qualifier on certain warranties?
   - Are there any materiality thresholds?
   - Is there a "recovery elsewhere" limitation (i.e., no double recovery)?

6. **Special Provisions**
   - Are there any W&I insurance proceeds offset provisions?
   - Are there any specific indemnities with their own separate caps?
   - Are there any conditional limitations (e.g., only applies if total claims exceed X)?

**Format your response as**:
- Clear bullet points for each category
- Flag any unusual or seller-favourable terms
- Note any ambiguities or drafting issues
- Calculate key metrics (e.g., "Cap represents 10% of purchase price")

[PASTE SPA LIABILITY SECTIONS HERE]

Extraction: Pulls all relevant liability limitation clauses from different sections of the SPA

Categorisation: Organises limitations by type (cap, basket, time limits, carve-outs)

Analysis: Identifies which liabilities are capped vs uncapped and why

Risk flagging: Highlights unusual provisions or seller-favourable terms

Clarity: Presents complex liability matrix in digestible format

Paste the following SPA sections:

• Limitation of Liability clause (usually a schedule or a separate clause)
• Time limits for warranty claims
• Indemnity provisions
• Claims procedure section (often contains basket/de minimis thresholds)

The AI will produce something like:

General Cap: £5M (10% of purchase price) - applies to all warranty claims except those listed below

Basket: Tipping basket of £50,000 - buyer must accumulate claims totalling £50k before any recovery (then recovers full amount including first £50k)

De Minimis: £10,000 per individual claim - claims below this threshold cannot be aggregated toward the basket

Uncapped Liabilities:

• Title and capacity warranties (Schedule 1, Part A)
• Tax covenant and tax indemnities (Schedule 4)
• Fraud and fraudulent misrepresentation
• [FLAG: Environmental indemnity is uncapped - unusual and seller-unfavourable]

Time Limits:

• General warranties: 18 months from completion
• Fundamental warranties: 7 years
• Tax warranties: 7 years from completion
• [NOTE: Compare the 18-month general time limit against your precedents]

• Flag Unlimited Warranties - Identifies warranties with no awareness qualifier, no materiality threshold, and unlimited lookback
• Check Disclosure Letter Quality Control - Ensures disclosures properly limit warranty liability

Practice Area: Corporate & M&A Document Type: Share Purchase Agreement (SPA) Difficulty: Intermediate Estimated Time: 15 minutes