Information supplied: Overview, definition, and example
What is information supplied?
Information supplied refers to any data, documentation, or disclosures provided by one party to another in the context of a business transaction, contract, or agreement. This can include financial statements, operational details, technical specifications, or any other information relevant to the terms of the agreement. The clause addressing "information supplied" often sets expectations for the accuracy, completeness, and use of the information provided.
For example, in a business acquisition, the seller may supply financial records and operational details for the buyer to evaluate before closing the deal.
Why is information supplied important?
The information supplied clause is important because it ensures that both parties have access to accurate and relevant data for making informed decisions. It establishes accountability for the accuracy of the information provided and protects the recipient from relying on false or misleading data.
For SMBs, this clause reduces the risk of disputes by clarifying the obligations and responsibilities related to the exchange of information, fostering transparency and trust in business relationships.
Understanding information supplied through an example
Imagine a small business enters into a partnership agreement with another company. The agreement requires each party to supply financial and operational information to evaluate the partnership's feasibility. The information supplied clause ensures both parties are responsible for providing accurate data and outlines the consequences of supplying false or incomplete information.
In another scenario, a startup seeking investment provides a potential investor with financial projections and a business plan. The information supplied clause in the investment agreement states that the startup guarantees the accuracy of this information to the best of its knowledge, protecting the investor from misrepresentation.
An example of an information supplied clause
Here’s how an information supplied clause might appear in a contract:
“Each Party represents and warrants that all information supplied to the other Party under this Agreement is, to the best of their knowledge, accurate, complete, and not misleading as of the date it is provided. The Party supplying the information agrees to promptly notify the other Party of any material changes or inaccuracies discovered after the information has been delivered.”
Conclusion
An information supplied clause ensures transparency, accountability, and accuracy in the exchange of data or documentation between parties. For SMBs, this provision helps establish trust, protects against reliance on false or incomplete information, and reduces the risk of disputes. Including a well-defined information supplied clause in contracts fosters clear communication and confidence in the business relationship.
This article contains general legal information and does not contain legal advice. Cobrief is not a law firm or a substitute for an attorney or law firm. The law is complex and changes often. For legal advice, please ask a lawyer.