Disclosure schedule
A disclosure schedule is the annex to a purchase agreement in which the seller lists the specific exceptions to the representations and warranties they are giving. A properly disclosed exception cannot later be the basis of a claim for breach of that representation.
Representations are written as clean, absolute statements — there is no litigation, all taxes are filed, all equipment is in working order. Almost no business is that clean. The disclosure schedule is where reality is recorded, and it is the seller’s primary protection against being sued for something the buyer already knew.
How sellers get it wrong
- Disclosing verbally in a meeting and assuming that counts — it generally does not
- Under-disclosing to keep the deal looking tidy, which converts a known issue into a claim
- Vague disclosure that does not give the buyer enough to understand the exception
- Leaving it to the last week, when there is no time to gather what is needed
Sources
This definition is checked against primary sources. Links were last confirmed on the dates shown.
- 01Canada Revenue AgencyGovernmentSelling a business
- 02Treadstone LawLegal commentaryDisclosure Schedules in an Ontario Business Sale Agreement
- 03Treadstone LawLegal commentaryHow Long Do Representations and Warranties Survive After an Ontario Business Sale?
- 04Treadstone LawLegal commentaryIndemnity Baskets and Caps in an Ontario Business Sale
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