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Agreement & warranties
Side letters in a business acquisition: notarial deed and disclosure
Side letters in a business acquisition: review authority, notarial deed relevance, disclosure, priority and SPA liability.
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BRANDAUER Rechtsanwälte
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22 July 2026 · Mag. Bernhard Brandauer, Rechtsanwalt
Side letters and side arrangements can be useful in a business acquisition, but they become risky when they develop a life separate from the SPA. Conflicts with the main agreement, missing authority and undertakings not reflected in the notarial deed or disclosure letter are sensitive. This article complements signing authority share transfer agreement and notarial deed disclosure letter
Review side arrangement
Does the side letter fit the acquisition agreement?
Answer two questions on the document set.
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Are there side arrangements outside the main agreement?
Side letter, payment instruction or special undertaking must match the SPA and authority to sign.
All paths at a glance
Overview of all answers.
The finding is well prepared for negotiation and contract drafting.
If documents, economic relevance and responsibility are clear, the point can be reflected in warranties, pricing logic or closing plan.
Sharpening is needed before signing.
Unclear evidence should not be hidden behind generic wording. The point needs a specific contract effect or a clear delivery plan.
What role a side letter plays in the deal
What role a side letter plays in the deal
A side letter can contain a narrowly defined additional arrangement, for example delivery of a document, a special undertaking or confidential commercial points. It does not replace the SPA.
The key starting point is document hierarchy. If main agreement, disclosure letter, authority document and side arrangement do not follow the same logic, priority later becomes uncertain.
Align notarial deed, authority and signature
Align notarial deed, authority and signature
In an Austrian GmbH share deal, the transfer is form-sensitive. Section 76 GmbHG is reflected through the notarial deed and supporting documents. Side arrangements must not undermine that form logic.
Practically, the signer of the side letter must have authority for that document. This is especially important with trustees, advisory boards, group approvals or seller groups.
Disclosure, priority and later proof
Disclosure, priority and later proof
If the side letter qualifies a risk or affects a warranty, the parties should be clear whether and how it was disclosed. Otherwise the buyer may later argue that information sat outside the agreed disclosure mechanism.
Useful tools are priority clauses, a list of transaction documents and a closing index. The SPA warranty catalogue should not be diluted by loose side letters.
Review grid
Classify side letters within the document set
The overview shows typical risks and responses.
| Point | Why it matters | Contract effect |
|---|---|---|
| Priority Priority | Conflict with the SPA | Priority clause and schedule |
| Form Form | Circumvention of notarial form | Check notarial integration |
| Authority Authority | Signer acts beyond mandate | Document authority scope |
| Disclosure Disclosure | Warranty remains disputed despite knowledge | Allocate disclosure expressly |
The documents, economic relevance and contract structure in the individual case are decisive.
Practical note: Side letters should not be a convenient parking place for unresolved issues. Economically important points need clear contract mechanics.
FAQ
Frequent questions.
Is a side letter in a business acquisition invalid? +
Not automatically. Content, form relevance, signature and relation to the main agreement are decisive.
Does every side arrangement need to be in the notarial deed? +
That depends on its content. For GmbH shares, it is particularly important to check whether the arrangement affects the form-bound transfer.
How can disputes over side arrangements be avoided? +
By clear priority, proper authority, express disclosure and a complete closing list.
Topics
Side letterSPANotarial deedDisclosure
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