In contracts on the purchase and transfer of companies, the so-called Sale and Purchase Agreement (SPA), the list of seller warranties and the legal consequences of breaches of warranty by the seller already occupies a dominant position due to the sheer volume and the usually central position in the text of the contract, although from the perspective of legal counsel other parts of the contract require at least the same if not even greater attention. However, this dominant position is not without reason for the guarantees, as it reflects the great economic importance of the seller guarantees for the parties to the SPA and the parties' widely divergent negotiating positions.

Negotiations on warranties are often controversial, and not without reason, because it is precisely in this area that the seller faces high economic risks that reduce the profit from the sale. As is already customary in"secondaries", i.e. company acquisitions and sales between private equity companies, private equity funds as sellers of portfolio companies are now also providing less and less extensive guarantees to strategic buyers. The reason given for this is that the Fund cannot provide any further guarantees for regulatory reasons. Strategic buyers are thus faced with the question of how to achieve the minimum level of protection through guarantees, apart from the usual fundamental hedges such as ownership of the shares ("title").

Thus, the parties often enter negotiations with extreme positions in order to have as unrestricted a negotiating position as possible; a balanced catalog of guarantees in the first draft of the purchase agreement rarely meets with the approval of the respective parties. The Seller shall make every effort to minimize the warranties to be given by it and to limit or exclude legal consequences as far as possible. The buyer, on the other hand, will in turn demand disclosure of all value-creating circumstances of the target company and, in the event that risks have not been disclosed, seek protection through extensive seller guarantees.