Disclosure

Question 1

How does disclosure protect the Seller?

Answer 1

• Seller qualifies the warranties, avoid liability for breach of warranty
• VPC

Question 2

Who drafts the Disclosure letter?

Answer 2

Seller’s solicitor

Question 3

Contents of a Disclosure letter

Answer 3

General disclosures - matters in public records

Specific disclosures - disclose against specific warranties

Question 4

Infiniteland

Answer 4

No universal standard of disclosure. Depends on what is agreed and wording in contract.

Buyer will want standard disclosure = fair disclosure

Question 5

Can a Buyer claim for breach of warranty if it knew before completion that the warranty was untrue (and was not disclosed by the Seller)?

Answer 5

Depends on what was agreed in AA

Seller should define ‘knowledge’

Question 6

Actual knowledge

Answer 6

Buyer knew

Question 7

Constructive knowledge

Answer 7

Buyer should have known

Question 8

Imputed knowledge

Answer 8

Buyer’s advisers/agents knew so assume Buyer knew

Question 9

Why is it dangerous for a Buyer to accept General Disclosures?

Answer 9

Buyer is deemed to know about matters included in the General Disclosures whether or not it actually does know about them.

These may include, for example, matters of public record and/or matters from its pre-completion searches/enquiries and/or matters contained in correspondence.