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This is a template disclosure letter for disclosing against warranties provided in an M&A or capital raising transaction.

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Typically under these transactions, a company (and, in some cases, its founders) provides statements to a purchaser or investor in the transaction documents. If any of these statements (known as warranties) turn out to be untrue, the purchaser or investor can bring a claim for a breach and potentially recover money from the parties that gave the warranties.

A disclosure letter protects warrantors, by allowing them to disclose any matters that are inconsistent with the warranties set out in the transaction documents. The purchaser or investor cannot bring a warranty claim in respect of matters which have been fairly disclosed. The disclosure letter is the document which formally records these disclosed exceptions to the warranties. It is therefore an integral part of the transaction documents and the earlier warrantors start preparing the document on any transaction, the better.

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