In the context of an acquisition, the process of the seller making available to the buyer general and specific information relating to circumstances, facts or matters that are inconsistent with the warranties contained in the acquisition agreement. The acquisition agreement will generally provide that the warranties are qualified by any such information disclosed by the seller to the buyer. If the seller fails to disclose a relevant circumstance, fact or matter in respect of the warranties, the buyer may sue the seller for breach of warranty. The seller usually makes its disclosures by providing the buyer with access to a data room containing relevant information about the target and inviting the buyer to conduct a due diligence review of this information. The seller will often also make specific disclosures against specific warranties in a disclosure letter and attach relevant documents to that letter to support its disclosures.

For further information, see Practice note, Disclosure letters.