Whose Warranty Survived the Sale of a London Optometry Practice

The situation

Four weeks after Sari took over Ngozi's optometry practice in London, a letter arrived from Sari's lawyer that changed the tone of what had been, until then, a friendly handover. The letter said Sari's corporation had been billed for nine warranty repairs and two full lens replacements on eyewear sold by Ngozi before the deal closed, and that Ngozi's corporation should reimburse every dollar. The number attached was modest on its own, in the low thousands, but the letter made clear it was a test case: if Ngozi paid, similar claims would keep arriving for as long as the two-year warranty period on those older sales ran.

Ngozi had sold her practice for roughly two point six million dollars after twenty years of building it from a single associate role into a clinic with three examination rooms and a steady base of repeat patients. Her husband, Emeka, had handled much of the administrative side for years and had stayed on for a short transition period after closing to help Sari's staff learn the booking and dispensing systems. Neither of them had expected a legal letter so soon.

The sale itself had closed under real time pressure. Sari, a veterinarian who had spent a decade building a mobile animal-care practice before deciding to diversify into a fixed-location health business, had a financing commitment with a rate hold that expired on a specific date, and a notice period on her existing commercial lease that meant she needed to be operating from a new location by a fixed point or lose her deposit. The purchase agreement had been negotiated, drafted, and signed inside six weeks, with several schedules finalized in the final days before closing. Both sides had pushed hard to make the deadline, and some of the boilerplate language about ongoing obligations had received less scrutiny than it might have in a slower deal.

Now that language was the whole dispute. Sari's position was straightforward: she had not sold any of the eyewear generating warranty claims, had not profited from those sales, and saw no reason her new corporation should absorb service costs tied to inventory Ngozi's business had sold and been paid for. Ngozi's position was just as straightforward from her side: she had sold the practice, its patient files, its ongoing relationships, and its brand, and a buyer taking over an established clinic normally takes over the obligations that come with an established clinic's existing customer base. Both were reading the same signed agreement and reaching opposite conclusions.

What the law actually said

An asset purchase agreement does not automatically hand every past obligation to the buyer just because the buyer now owns the business. In an asset sale, as opposed to a sale of shares, the buyer typically acquires specific assets and assumes only the liabilities the agreement says it assumes. Most of what is left off that list stays with the seller's corporation, and the agreement decides which of the remaining liabilities the buyer picks up. A short list of obligations follows the business no matter what the paperwork says, though: an employee's length of service for employment standards purposes, obligations to a union where the business is sold as a going concern, environmental responsibility that attaches to the property or the operator, and certain tax liabilities. The agreement can decide who ultimately pays those as between buyer and seller; it cannot stop the claim being made against the buyer. A warranty claim on eyewear already sold is not one of those exceptions. That distinction matters because it means the answer to who owes a warranty claim is not a general rule about fairness or common sense in the optical industry. It is a specific question about what one paragraph of one signed document actually says.

Ngozi's agreement with Sari had a schedule listing assumed liabilities and a separate schedule listing excluded liabilities, drafted in the pattern most business sale agreements use. The assumed liabilities schedule included ongoing lease obligations, employee entitlements going forward, and, critically, a line describing customer warranty and service commitments tied to the practice's inventory and dispensing records as of the closing date. That line had been added deliberately during negotiation, at Sari's own request, because she wanted uninterrupted continuity for existing patients rather than a practice where some patients had warranty coverage and others, who happened to buy the week before closing, did not.

The excluded liabilities schedule, by contrast, carved out things like pre-closing tax obligations and any litigation that existed before the sale. It said nothing about warranties, because the warranties had already been placed on the other list.

This is where the compressed timeline mattered less than either side assumed. The clause had not been an oversight rushed through in the final week; it reflected an actual negotiated decision made earlier in the process, when both sides had more time to think it through, and it survived into the final signed version unchanged. What had gotten rushed was the closing mechanics and some ancillary consents, not the liability allocation itself.

There was also a practical reason the clause made sense regardless of what either side later wished it said. Patients do not track which entity technically sold them their glasses. A practice that changes hands but suddenly stops honouring recent warranties damages the very goodwill the buyer paid for. Interpreting a business sale agreement generally starts with what the words actually say, and only turns to surrounding circumstances when the words are genuinely unclear. Here, the words were not unclear. They said what they said, and what they said was that Sari's corporation had agreed, going in, to take on exactly the obligations it was now trying to hand back.

What we did

1. Reviewed the full purchase agreement and its schedules line by line. We began by pulling the executed agreement rather than relying on anyone's memory of what had been discussed, because six weeks of fast negotiation meant the final wording could easily differ from an earlier draft either side remembered more favourably. Comparing the signed schedules against the correspondence trail confirmed the warranty language had in fact been added at Sari's request during an earlier round, not inserted quietly at the end, which mattered for how we could characterize it in our response.
2. Identified the specific assumed liabilities clause and traced its drafting history. Using the email exchanges from the deal, we located the point where Sari's own lawyer had proposed the warranty continuity language, and confirmed it had been accepted without further revision. This let us respond to the demand with the actual paper trail rather than a general argument about how asset sales usually work, which is a much stronger position when the other side is disputing the outcome rather than the wording.
3. Drafted a response letter grounding the answer in the agreement's text. Rather than arguing broadly about fairness or industry norms, we wrote back quoting the exact clause, the schedule it appeared in, and the date it was added, and explained plainly why it placed the warranty obligations with Sari's corporation as of closing. Keeping the letter narrow and document-based made it hard for the other side to reframe the dispute as a matter of interpretation rather than plain language.
4. Confirmed the two-year warranty exposure was fixed and calculable, not open-ended. We asked Ngozi's former staff to help estimate the total remaining warranty exposure across the older inventory, so that if a negotiated resolution became necessary, everyone would be working from the same realistic number rather than an inflated worst case. This step also let us confirm the dispute, while unwelcome, was never going to be large enough to threaten either practice financially.
5. Addressed the tight-deadline closing directly, rather than letting it become an excuse. Because the sale had closed on compressed timing, we anticipated the argument that something had been rushed or overlooked, and got ahead of it by walking through the deal timeline in our response, showing the warranty clause was negotiated well before the final crunch and simply carried forward unchanged, which closed off the most likely fallback argument.
6. Held a short call between the parties' lawyers rather than escalating in writing. Once the documentary position was clear, we suggested a direct call between counsel instead of a further exchange of letters, since the dispute turned on one clause rather than a broad disagreement, and a conversation was more likely to resolve it quickly than another round of formal correspondence would have been.
7. Confirmed the outcome in a short written acknowledgment. Once Sari's lawyer accepted the clause's meaning, we prepared a brief letter confirming that no reimbursement was owed and that the assumed liabilities schedule governed going forward, so both sides had a clear written record closing the issue rather than an informal understanding that could resurface later if a new warranty claim came in.

The outcome

Sari's lawyer withdrew the demand within two weeks of receiving our response. Once the drafting history was laid out plainly, the dispute did not go to negotiation over money at all, because Sari's own earlier request for warranty continuity, made for good commercial reasons at the time, left no real room to argue the clause meant something else after the fact. No reimbursement was paid, and no formal claim was ever filed.

The result did not damage the working relationship between the two practices, which mattered because Sari had inherited Ngozi's patient base and Ngozi's name still carried recognition locally even after the sale. Emeka's brief transition period continued as planned, and by the time it ended, warranty service had folded into Sari's normal operations without patients noticing anything had changed.

For Ngozi, the outcome confirmed something she had worried about during the rushed final weeks of the deal: that speed does not automatically mean sloppiness, provided the substantive clauses were negotiated properly earlier and only the closing mechanics got compressed at the end. The specific language allocating warranty obligations had been the product of real back-and-forth, not an afterthought, and that made it durable once tested.

The exposure at stake was never large in dollar terms, but the principle mattered more than the number. Had the clause been ambiguous, or had it been drafted at the last minute without either side really considering it, the outcome could easily have gone the other way, with Ngozi facing years of trickling claims on inventory she had already been paid for and no longer controlled. Instead, the practice sale closed the book cleanly: the corporation that owned the business going forward owned the obligations that came with it, exactly as both parties had agreed when there was still time to think it through.

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