Buyer’s Remedies Under the Share Purchase Agreement

The purpose of the research work was to identify both theoretical and practical problems associated with the application of remedies to protect the rights of the buyer under the contract of sale of shares or interests. The work fully analyzes the topical issues of assurances of circumstances (representations and warranties) and the obligation to compensate for property losses. The questions about the legal nature of these institutions are raised, the tasks, principles and mechanisms of implementation of representations and warranties and the obligation to compensate for losses, their role and place in the system of civil law are disclosed. The means of protection of buyer's rights arising from representations under both Russian and English law are compared. The questions of whether warranties can be given for the future and whether a buyer of shares or interests should be prudent are analyzed. The institution of indemnity is analyzed. The author came to the conclusion that warranties in Russian law are obligations to guarantee the reliability of the information provided, except in cases where the such warranties were of a fraudulent nature. The application of one or another remedy depends on the qualification of the legal nature of these or those warranties. The indemnity is not a remedy under Russian law, but it is a remedy under English law. The author concludes that the application of this institution must be carried out with caution, as the buyer risks that the provision on the indemnity may be reclassified as an obligation to compensate for damages or penalty.