U.S. states are divided on whether pre-contract representations can form the basis of a right to wrongdoing if the written agreement contained a full contractual clause and/or a statement without any confidence. Some states, including New York, generally take a “contractual approach” to prevent demanding parties from circumventing the law from the punitive barriers they have contractually entered into. Although market practices are increasingly coordinated in the United Kingdom and the United States, some important distinctions remain (including safeguards, representations and disclosure). The U.S. and English courts have chosen different approaches to the interpretation and application of certain provisions of purchase and sale contracts, which can have a significant impact on the distribution of risk between buyer and seller. Differences between the underlying legal considerations must be taken into account by the parties to a transatlantic transaction. A share purchase agreement (SPA) is the main contract used for a private sale of shares. With respect to a sale contract in the United Kingdom, the information provided by the seller against the guarantees is usually contained in a separate disclosure letter and not in the schedules of the agreement itself, as is sometimes the case in the United States. The newsletter usually contains “general” information (. For example, issues in public registers) that qualify all guarantees and “specific” information which, although they generally refer to certain guarantees contained in the agreement, are often considered to be effective information about all safeguards (whether or not they are specifically linked to a specific guarantee). Finally, other states than New York have different positions, as has already been mentioned.
For example, in Hendricks v. Callahan, 972 F.2d 190 (8th Cir. 1992), the U.S. Court of Appeals for the Eighth Circuit (allegedly enforcing Minnesota law) stated that “to allow a party that disposes of a violation of the express or implied guarantee, it must be clear and clear that there is indeed confidence in the guarantees in question.” In other words, if the applicant had been aware of the false guarantee, he could not have relied on it and therefore would not have been able to claim contractual prejudice because the guarantee was false.