Disclosure Letter Template for Netherlands

A Disclosure Letter plays a crucial role in Dutch M&A transactions by documenting exceptions to warranties in a purchase agreement. It lets sellers inform buyers about specific issues, risks, or circumstances that might otherwise breach the deal's warranties - protecting sellers from future claims.

Under Dutch law, this letter forms an integral part of the transaction documents and directly affects the buyer's rights. Sellers must be thorough and precise when preparing it, as Dutch courts generally hold that properly disclosed items prevent buyers from later claiming compensation for those specific issues. Common disclosures include pending litigation, incomplete permits, or ongoing contract disputes.

The time to prepare a Disclosure Letter comes when you're selling a business or substantial assets in the Netherlands. This document becomes essential during the due diligence phase, before signing the final purchase agreement. It helps protect sellers by formally documenting any known issues that might conflict with the warranties they're giving.

Specific situations calling for a Disclosure Letter include selling a company with pending regulatory approvals, properties with environmental concerns, or businesses facing unresolved legal disputes. Dutch courts give significant weight to properly disclosed items, making this step crucial for managing post-sale liability and avoiding future disputes about what the buyer knew before closing.

• Company Disclosure Letter: Standard comprehensive version used in corporate M&A deals, covering all business aspects
• Letter Of Non Disclosure Agreement: Focuses on protecting confidential information during the disclosure process
• Consent Letter To Disclose Confidential Information: Used when third-party permission is needed to share specific information
• Non Disclosure Letter: Simplified version for smaller transactions or specific disclosure needs
• Confidentiality Agreement Letter: Emphasizes mutual confidentiality obligations during information exchange

• Selling Companies: Primary creators of Disclosure Letters, working with their legal teams to document all exceptions to warranties
• Corporate Lawyers: Draft and review the letters, ensuring compliance with Dutch law and protecting their clients' interests
• Acquiring Companies: Review disclosures as part of due diligence, often through their legal and financial advisors
• Board Members: Must approve and often sign the letter, taking responsibility for its completeness and accuracy
• External Auditors: May review disclosures when they relate to financial statements or accounting practices
• Regulatory Bodies: May examine disclosures in regulated industries or when public interest is involved

• Review Purchase Agreement: Carefully analyze all warranties to identify potential exceptions requiring disclosure
• Gather Documents: Collect relevant contracts, permits, financial records, and correspondence showing issues needing disclosure
• Internal Review: Consult department heads about known issues, disputes, or compliance matters
• Structure Information: Organize disclosures to match warranty sections in the purchase agreement
• Draft Details: Use our platform to generate a legally sound Disclosure Letter template, ensuring all key elements are included
• Supporting Evidence: Prepare and index all referenced documents in a disclosure bundle
• Final Check: Verify completeness and accuracy with key stakeholders before finalizing

• Introduction: Clear identification of parties and reference to the main purchase agreement
• Purpose Statement: Explicit link to warranties and confirmation of disclosure intent
• General Disclosures: Information available in public registers or provided during due diligence
• Specific Disclosures: Detailed exceptions to each warranty, organized by corresponding sections
• Document List: Index of all supporting materials in the disclosure bundle
• Fair Disclosure: Statement on information accessibility and buyer's understanding
• Signing Block: Authorized signatures, dates, and company details per Dutch requirements
• Governing Law: Explicit choice of Dutch law and jurisdiction

A Disclosure Letter often gets confused with a Disclosure Agreement, but they serve distinctly different purposes in Dutch business transactions. While both deal with information sharing, their timing, scope, and legal effects differ significantly.

• Purpose and Timing: Disclosure Letters specifically document exceptions to warranties in a purchase agreement, used during M&A transactions. Disclosure Agreements set ongoing rules for sharing confidential information, typically used before due diligence begins.
• Legal Effect: A Disclosure Letter provides legal protection against warranty breach claims for specific disclosed issues. A Disclosure Agreement creates mutual obligations for handling sensitive information but doesn't affect warranty claims.
• Content Structure: Disclosure Letters contain detailed lists of exceptions linked to specific warranties. Disclosure Agreements focus on confidentiality obligations, permitted uses, and information return or destruction.
• Duration: Disclosure Letters have permanent effect for disclosed items. Disclosure Agreements typically have a defined term and survival period.