CONTEXT(CLONE)
Sign in

Read each disclosure against the warranty it qualifies

For: Transaction counsel for buyer or seller negotiating the disclosure letter

Pattern: Cross-examinationNeeds live modelsDesigned for 6 to 250 agents
Get early accessSign in to use

The pain today

A disclosure letter arrives late with general and specific disclosures and bundles of documents. Whether a disclosure is fair and specific enough to qualify a warranty is judged at night, clause by clause, before signing.

The ask

“I attached the draft share purchase agreement with its warranties, the disclosure letter and the disclosure bundle. For each disclosure, tell me which warranties it qualifies, whether the disclosed documents really show the matter described, and which disclosures are vague or wider than they look.”

Plain words, as you would say it to a colleague. Edit it to fit your case before you send it.

What you attach or connect

  • Draft share purchase agreement with warranty schedule
  • Disclosure letter, general and specific
  • Disclosure bundle documents
  • Due diligence report findings

The unit of work

One worker task per one disclosure against one warranty.

Why a swarm fits

Disclosures multiplied by warranties gives many small pairs, each needing a paragraph, a warranty and a few documents. The reading decides who bears a loss, so two families read each pair independently.

Not for

A short letter with few specific disclosures, or the legal standard of fair disclosure, which only counsel can apply.

The decision tree

6 typed decisions, each with an action for every answer

At fixed moments in a run, the engine puts one narrow question to a decision model. The decision model never writes text: it answers yes or no with a probability, picks from listed options, or gives a score, about a small slice of the material. The engine then does exactly what this tree says, which is what makes the run auditable. The thresholds are the template's design values, not measured results.

  1. Planner, while planning

    Scope checkYes or no, with a probability

    Before work starts on a unit

    Could this disclosure qualify this warranty, judged by subject matter, even where the letter does not name the warranty?

    Sees only: One disclosure paragraph and one warranty

    Why: Prunes the disclosure-by-warranty grid without missing unnamed hits.

    • Yes: 0.40 or higherthenAccept
    • Unsure: 0.15 up to 0.40thenAccept
    • No: below 0.15thenSkip this unit

  2. After workers, the judge checks

    Evidence checkYes or no, with a probability

    After a worker answers

    Does the bundle document referred to exist at the stated index and describe the matter in the terms the disclosure letter uses?

    Sees only: The disclosure paragraph and the bundle document's relevant page

    Why: Disclosures that overstate or misdescribe their document are the ones to push back on.

    • Yes: 0.85 or higherthenAccept
    • Unsure: 0.50 up to 0.85thenEscalate to a strong model
    • No: below 0.50thenReject and retry

  3. Reconciler, while merging

    Conflict checkA choice among options

    While reconciling

    Do the two independent readings agree on whether this disclosure is specific enough to qualify the warranty?

    Sees only: Both readings of one pair with their quotes

    Why: Disagreement between families marks the pairs counsel must read.

    • Both say it qualifiesthenAccept
    • Both say it does notthenAccept
    • They disagreethenEscalate to a strong model

  4. Run control, between rounds

    Retry or stopA choice among options

    After a rejection or low confidence

    What does the disclosure actually tell the buyer about the matter?

    Sees only: The disclosure paragraph and the document it points to

    Why: Vague disclosures shift risk quietly; they are surfaced, not judged.

    • States the nature and extent of the matterthenAccept
    • Only points to a folder of documentsthenMark unresolved
    • General reference to public recordsthenMark unresolved

  5. Reconciler, while merging

    Conflict checkYes or no, with a probability

    While reconciling

    Is this due diligence finding covered by any disclosure in the letter?

    Sees only: One finding and the disclosures retrieved for its subject

    Why: Known issues with no disclosure are candidates for a specific indemnity.

    • Yes: 0.70 or higherthenAccept
    • Unsure: 0.40 up to 0.70thenMark unresolved
    • No: below 0.40thenMark unresolved

  6. Accountable person, before anything is settled

    Person decidesYes or no, with a probability

    Before anything is reported as settled

    Would accepting this disclosure shift a known or likely loss from the seller to the buyer?

    Sees only: The schedule entry for one warranty

    Why: Transaction counsel decides what to accept, resist or indemnify.

    Accountable: Transaction counsel decides which disclosures to accept, push back on or cover with a specific indemnity.

    • Yes: 0.30 or higherthenAsk a person
    • Unsure: 0.10 up to 0.30thenAsk a person
    • No: below 0.10thenAccept

The fleet: who does what

Model tiers by role, not brands: you choose the models. Strong reasoning models plan and reconcile, small fast models do the wide work, and the judge is a decision model from a different family, so it does not share the workers' blind spots.

  1. Planner

    A strong reasoning model pairs each disclosure with the warranties it could touch, including ones it does not name.

    Decisions here:1. Scope check

  2. Workers

    Two sets of mid-sized workers from different families assess each pair independently against the disclosed documents.

    Designed for 6 to 250 agents, one worker task per one disclosure against one warranty. Each worker receives only its own unit.

  3. Judge, from a different model family

    A decision model from a third family settles disagreements only where the quoted text decides it, and leaves the rest open.

    Decisions here:2. Evidence check

  4. Reconciler

    A strong reasoning model builds the warranty-by-warranty view and ranks vague or over-broad disclosures by exposure.

    Decisions here:3. Conflict check4. Retry or stop5. Conflict check

  5. Accountable person

    Transaction counsel decides which disclosures to accept, push back on or cover with a specific indemnity.

    Decisions here:6. Person decides

Checked before anything is accepted

  • Each assessment quotes the disclosure, the warranty and the bundle document
  • Disclosed documents are checked to exist in the bundle and to say what the letter states
  • Known due diligence findings are matched to disclosures to find undisclosed issues
  • Disagreements between the two readings are reported with both arguments

What comes back

  • Warranty-by-warranty schedule of qualifying disclosures
  • Vague, over-broad or unsupported disclosures with reasons
  • Due diligence findings not covered by any disclosure
  • Pairs where the two readings disagree

What to measure

  • Agreed assessments overturned by counsel
  • Disclosure points raised in negotiation that the review had found
  • Counsel hours per disclosure letter round

Names of measures only. No result is claimed for this template.

Templates open in the workspace chat with the ask filled in. Nothing runs until you send it.

Get early accessSign in to use

More in Due diligence and M&A

Red-flag customer contracts for change of control and exit rights

For: M&A associate or corporate development manager on a buy-side review

The value of the target sits in its customer contracts, and the data room holds hundreds with order forms and amendments.

Pattern: Map, verify, reduceRuns today6 decisionsDesigned for 4 to 300 agents

Test every claim in the information memorandum against the data room

For: Private equity investment manager or corporate development lead before a binding offer

The seller's memorandum and management presentation make claims about customers, retention, pipeline, capacity and compliance.

Pattern: Adversarial reviewNeeds live models6 decisionsDesigned for 8 to 400 agents