Deemed disclosure treats everything in the data room, or an agreed slice of it, as fairly disclosed against the warranties, whether or not it is individually referenced in the disclosure letter. For a seller, it is a safety net under the disclosure letter, not a replacement for it.
Technically, it is a contractual provision stating that specified data room material is deemed disclosed for the purposes of qualifying the warranties, regardless of whether the disclosure letter itself cross-references each document. Buyers are often wary of it and, where they accept it, usually push to narrow its scope to a defined index or to particular categories of warranty.
The seller wants deemed disclosure as broad as possible, ideally the entire data room, because it protects against the disclosure letter missing something a careful buyer’s adviser would have found anyway. The buyer wants it narrow or absent, so their warranty protection cannot be quietly diluted by volume.
The tension is really about who bears the risk of a badly organised data room. Broad deemed disclosure shifts that risk to the buyer’s advisers, who have to actually read what they were given. Narrow deemed disclosure shifts it back to the seller, who has to catch everything material in the letter itself.
What you as a seller should push back on: deemed disclosure limited to a short, curated index rather than the full data room, and carve-outs that exclude the warranty categories that matter most to your exposure.