Disclosure letter (Ro.: scrisoare de divulgare sau de aducere la cunoştinţă. Fr.: lettre de divulgation, n.f., Cz.: konečné vyjádření) (See also: due diligence, mergers and acquisitions, risk, transactions, warranties) = a letter sent by the seller to the buyer, concerning a business sale, in which the seller discloses any matters which qualify or contradict the warranties contained in the sale and purchase agreement. 

From the seller’s point of view, it limits his/her liability under the warranties in the acquisition agreement. From the buyer’s point of view, it acts as an important source of information about the business or company being sold. In terms of effects, the disclosure letter reduces the buyer’s rights under the warranties, thus increasing the risk assumed.

It usually consists of two parts, (a) the general disclosures consisting of information which would be available to any buyer searching a publicly available register, and (b) specific disclosures, linked directly to the company at hand.  

The disclosure letter is a mandatory part of the due diligence process.


Useful links

Organisations and associations - Company Disclosure Letter, Wisconsin Office of the Commissioner of Insurance (USA)

Online Publications - Heym, Robert Alan, Advice on M & A: disclosure letter and disclosure schedules, - Briefing Note: The Disclosure Letter Explained, - 2012, Warranties, indemnities and disclosure in business and company sales, - Disclosure letter, - Slaughter and May, 2007, Due Diligence and Disclosure in Private Acquisitions and Disposals, – Cave, Bryan, 2013, Disclosure in M&A Transactions: UK & US Perspectives, - Disclosure letters, - Disclosures in M&A agreements, - Ivory, Ian, 2013, Warranties and the concept of 'fair' disclosure,


Cockburn, Wiseman, 1996, Disclosure Obligations in Business Relationships, Australia, The Federation Press

Howson, 2003, Due Diligence: The Critical Stage in Mergers and Acquisitions, USA, Gower Publishing

Jackson, 2012, The White Book Service 2012, UK, Thompson Reuters (Professional)

Lajoux, Elson, 2010, The Art of M&A Due Diligence, 2nd edition, USA, The Tim McGraw-Hill Companies, INC


By Mircea Farcău