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Updated Disclosure Letter

October 2020

The disclosure letter relating to the sale of a business or assets, has been updated. The sale of a business or assets will be governed by a Business Purchase Agreement (BPA), this will however be accompanied by a disclosure letter, which is a key document in any asset or business purchase transaction.

A disclosure letter:

· provides specific information to the buyer that it may otherwise not be aware of;

· can update the buyer with any changes to documents or information that may have already been provided to the buyer earlier in the sale process; and

· serves to minimise a seller’s liability by limiting any warranties that the seller provides. It does this by setting out any information about the sale assets that is inconsistent with the warranties in the BPA.

The existing template has been updated to modernise it and make it consistent with the new BPA template, specifically in that the new BPA contains short form warranties. For any customers using the BPA, this template may be used alongside it. This disclosure template is divided into three distinct sections, an introduction, general disclosure which is generic and can apply across most transactions and specific disclosure, tailored to the relevant transaction in question.

The contents of this Newsletter are for reference purposes only and do not constitute legal advice. Independent legal advice should be sought in relation to any specific legal matter.

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