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A Disclosure Letter works as a key safeguard in Swiss M&A transactions, letting sellers inform buyers about exceptions or qualifications to their contractual warranties. It's where a company reveals important details that might affect the deal's value or terms - from pending lawsuits to potential tax issues.

During due diligence under Swiss law, this document helps protect sellers from future warranty claims by making all known issues transparent upfront. It typically includes specific schedules, supporting documents, and detailed explanations that become an integral part of the purchase agreement, creating legal certainty for both parties.

Use a Disclosure Letter when selling a business or significant assets in Switzerland, particularly during the final stages of M&A negotiations. This document becomes essential once you've agreed on warranties with the buyer but need to highlight specific exceptions or issues that could affect the deal's terms.

The timing matters - prepare it alongside the main purchase agreement, but before signing. Swiss courts expect sellers to be thorough and transparent, so include all known exceptions to warranties, from minor contract breaches to major regulatory compliance gaps. This protects you from future claims and helps maintain the deal's integrity.

• General Disclosure Letters form the standard base, covering all warranties in the purchase agreement
• Specific Topic Disclosure Letters focus on particular areas like tax, employment, or intellectual property matters
• Schedule-Based Letters organize disclosures by warranty sections, common in complex Swiss M&A deals
• Supplemental Disclosure Letters add new information discovered during the transaction period
• Industry-Specific Letters adapt to unique requirements of regulated sectors like banking or pharmaceuticals

• Selling Companies: Draft and sign the Disclosure Letter, taking responsibility for accuracy of disclosures about their business
• Corporate Lawyers: Prepare and review the document, ensuring legal compliance and proper risk allocation
• Acquiring Companies: Review disclosures to assess deal risks and adjust purchase terms accordingly
• Board Members: Approve final content and verify completeness of disclosures
• Due Diligence Teams: Cross-reference disclosures against findings from their investigations
• Financial Advisors: Help identify and quantify impacts of disclosed items on deal valuation

• Review Warranties: Carefully examine all warranties in the purchase agreement to identify exceptions needing disclosure
• Gather Documents: Collect relevant contracts, permits, financial records, and compliance reports
• Internal Review: Consult department heads about potential issues requiring disclosure
• Structure Content: Organize disclosures to match warranty sections in the main agreement
• Draft Clearly: Write specific, factual statements avoiding ambiguity or speculation
• Cross-Reference: Ensure all supporting documents are properly referenced and attached
• Final Check: Verify completeness against due diligence findings and warranty list

• Introductory Statement: Define the document's purpose and relationship to the main purchase agreement
• Warranty References: Clear cross-references to specific warranties being qualified
• Disclosure Details: Precise descriptions of exceptions or qualifications to warranties
• Supporting Schedules: Organized appendices containing relevant documentation
• Time Specifics: Clear statement of when disclosures are made and effective
• Signature Block: Full details of authorized signatories with execution date
• Governing Law: Explicit reference to Swiss law application
• Fair Disclosure: Statement confirming full and fair disclosure standard

A Disclosure Letter differs significantly from a Disclosure Statement in both scope and application under Swiss law. While both documents serve transparency purposes, they function quite differently in practice.

• Purpose and Context: Disclosure Letters specifically qualify warranties in M&A transactions, while Disclosure Statements serve broader purposes across various business contexts, from financial reporting to regulatory compliance
• Timing and Duration: Disclosure Letters are transaction-specific documents tied to a particular deal's timeline, whereas Disclosure Statements often serve as standalone documents with ongoing relevance
• Legal Effect: A Disclosure Letter directly modifies contractual warranties and provides legal protection against future claims, while a Disclosure Statement typically serves as a general information document without direct warranty implications
• Content Structure: Disclosure Letters follow the warranty structure of the purchase agreement, while Disclosure Statements usually follow standardized formats based on regulatory requirements