Fair disclosure is the standard applied in Australian share sale and asset sale agreements to determine whether a matter raised in the disclosure letter (or data room) qualifies the warranties in the agreement. To constitute fair disclosure, the matter must be disclosed in sufficient detail to enable a reasonable buyer to understand its nature, scope, and potential consequences.
A bare reference to a document in a long index, or a single line buried in 8,000 pages of data room material, is unlikely to constitute fair disclosure. Sellers should make material disclosures specifically and explicitly in the disclosure letter, not rely on volume of disclosure to provide protection.