Selling your business is a drastic step. You want the sales process to go smoothly, but at least as important is that you, as the seller, are well protected against possible claims or disputes after the transfer. Especially when selling shares, it is all about clear agreements on warranties, breaches and indemnities, and limiting your liability. These are the legal foundations that make your risks manageable.
In practice, discussions about, for instance, forecasts, guarantees or liability can quickly arise. The judgment of the District Court of The Hague of 26 February 2025 (ECLI:NL:RBDHA:2025:3264) underlines how important it is as a seller to have your affairs in order contractually and to be careful in the information you provide. This case shows how, with the right agreements and a thorough sales dossier, you can significantly strengthen your position. It gives you concrete tools to limit risks and insight into what you should pay attention to as a seller when drawing up contracts and conducting proceedings.
The case study: share transaction, loan and discussion of forecasts
In this case, Payment Secured B.V. sold via a share transaction all shares in an operating company to Axiom Partners Netherlands B.V. Part of the purchase price was paid via a money loan. After the acquisition, the buyer claimed that the financial forecasts provided by the seller were not realistic and that guarantees had been breached. The buyer therefore refused to repay (in full) and invoked error, suspension and set-off.
In the proceedings, the seller claimed repayment of the loan amount, plus interest and costs. The buyer put forward a defence and counterclaims.
Legal key points: contractual protection for the seller
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Contractual exclusion of error
The sales contract explicitly provided that, to the extent permitted by law, the parties waived the right to claim annulment for error. This is an important tool for sellers to limit subsequent discussions about alleged wrong expectations. The court confirmed that professional parties can contractually exclude reliance on error, except in cases of deliberate deception or fraud. -
High threshold for reliance on mistake and deceit
The buyer argued that the forecasts had been deliberately overstated. However, the court set the bar high: only if the seller knew or should have known that the forecasts were not realistic can a claim of mistake or deceit succeed. In this case, the buyer could not sufficiently substantiate this. The mere fact that the results were disappointing was insufficient. This offers sellers comfort: as long as you are transparent and do not withhold information, the risk of annulment for error is limited. -
Guarantees and information obligations
The court emphasised that the seller did not guarantee that forecasts would actually be achieved, but only that the underlying information was correct to the best of its knowledge. Again, as a seller, you have to be careful in the information you provide, but you are not liable for the failure of future forecasts to come true, unless you knowingly gave false information. -
Suspension and set-off
The buyer sought to suspend and set off the repayment obligation against alleged counterclaims. The court rejected these defences as there were no sufficiently substantiated counterclaims. This highlights the importance of a clear contractual arrangement on set-off and suspension. -
Callability of the loan
The loan was not due and payable until it was established that there was no valid counterclaim by the buyer. The court granted the seller's claim as of the date the judgment becomes irrevocable. This provides sellers with certainty that they can eventually collect their claim, provided they fulfil their contractual and information obligations.
Practical lessons for sellers
This ruling shows how important it is as a seller:
- Explicitly waive the right to set aside for error (to the extent permitted) in contracts.
- Formulate guarantees and information obligations in a clear and limited way.
- Base forecasts on real and substantiated assumptions, but make it clear that they are future expectations.
- Make clear agreements on suspension, set-off and the claimability of claims.
- Have a good file structure so that you can prove in proceedings that you have fulfilled your obligations.
How can TK help you?
If you are a seller involved in a share transaction, contact one of our specialists (corporate/M&A). Do you foresee a post-acquisition dispute, contact one of our specialists (Corporate & Commercial Litigation) We will be happy to advise you.
