What good disclosure schedules look like.

Sellers want the disclosure schedules to be sparse. Buyers want them to be complete. The right answer is neither.

The disclosure schedules should be specific. Every exception cross-referenced to the representation it modifies. Every known issue surfaced with enough detail that R&W underwriting can price it without asking three follow-up questions.

Sparse schedules invite indemnification claims post-close. Over-broad schedules trigger general disclosure language that defeats specific reps. Specificity protects both sides.

The reps and warranties in the purchase agreement are organized by topic: corporate authority, financial statements, customers, employees, taxes, environmental, IP, litigation. Each rep is a statement of fact. "The company is in compliance with all applicable laws."

The disclosure schedules are organized to mirror the reps. For each rep, the schedule lists the exceptions. "Compliance with laws, except for the following: pending OSHA inquiry related to the [facility] dated [date]."

Sparse schedule example. The seller's lawyer drafts with minimum detail: "The Company has had inquiries from regulatory authorities from time to time in the ordinary course of business." That is technically a disclosure. It is also useless. What is the OSHA inquiry about? Is it a citation issued, or a request for information? What facility? What date? What is the potential exposure?

Post-close, if the OSHA matter results in a citation and penalty, the buyer's lawyer argues the schedule was inadequate disclosure. The R&W policy may or may not cover it.

Over-complete schedule example. The seller's lawyer drafts with maximum detail: 40 separate matters including a $300 OSHA inquiry from three years ago that was resolved without citation, a customer service complaint resolved with a refund, a former employee's verbal threat of a wage claim that never materialized. The buyer's lawyer is overwhelmed. The R&W underwriter wants to exclude every disclosed matter.

Specific schedule example. For the OSHA matter: "On [date], OSHA initiated an inquiry into the [facility] regarding [specific topic]. As of the date of this Agreement, the inquiry is at the [stage] phase. The Company estimates potential exposure of [$X to $Y]. Counsel is [law firm]. The inquiry is being managed by [employee] with oversight from [executive]."

That paragraph is what a specific schedule looks like. The buyer's lawyer can evaluate the exposure. The R&W underwriter can price it. The seller's lawyer is not on the hook for over-disclosure.

The schedules are the document where the lawyer's work shows.