A disclosure letter (sometimes called the disclosure schedule) is a document delivered by the seller to the buyer at signing that qualifies the warranties given in the share sale or asset sale agreement. Where a disclosure correctly identifies a fact that would otherwise breach a warranty, the seller is generally not liable for breach of that warranty in respect of the disclosed matter.
The disclosure letter is the principal mechanism by which sellers limit warranty exposure, and its drafting is one of the most consequential late-stage tasks in any Australian deal.