A guide and template for non-reliance letters for independent consultants and other professionals
Also see the Umbrex Consulting Contract Guide & Templates
What is a non-reliance letter?
A non-reliance letter, in essence, states that no communication (written or oral) received from a party shall be deemed to be an assurance or guarantee as to the expected results of that transaction for another party.
These are typically standard documents that protect a diligence provider from liability by stating that a report is for informational purposes only and cannot be used as the basis for a legal claim.
When is a non-reliance letter used?
A non-reliance letter is commonly used when a company shares a report from a third-party service provider with other parties and incorporates routine clauses protecting the company or individual issuing the letter from liability.
Non-reliance letters are typically used in the following situations:
- Due diligence reports: When third-party service providers conduct due diligence for a transaction, they often require recipients to sign a non-reliance letter before sharing their reports. This protects the provider from liability and ensures that the recipient uses the report at their own risk.
- Timeshare contracts: Non-reliance clauses, also known as “Salesman’s License to Lie” provisions, are used in timeshare contracts to protect real estate salespeople from legal consequences for making false claims.
- Purchase agreements: Non-reliance provisions, also known as “no-reliance” or “anti-reliance” provisions, are used in purchase agreements to prevent buyers from making fraud claims against sellers.
Who uses a non-reliance letter?
What are the sections of a non-reliance letter?
Most consultants will use the same letter in every instance, changing only the names of the involved parties and the description of the underlying transaction.
A non-reliance letter used by independent consultants typically includes these sections:
Description: Identify the parties
Sample language:
You have requested that [Insert Consultant Name] (“we” or “us”) provide you with a copy of [Describe Relevant Document/Report/Analysis] (the “Report”) that we prepared for our client, [Insert Client Name] (the “Client”), in connection with its consideration of a potential transaction involving [Insert Target Company Name] (the “Company”; and such possible transaction being the “Transaction”). We are willing to deliver a copy of the Report to you, and may from time to time provide you with copies of other presentations, analyses, reports or information furnished or to be furnished to the Client (the Report and any such other materials being herein referred to, collectively, as the “Work Product”), on the basis of, and subject to your acknowledgment and agreement to, the conditions and limitations set forth below and in the Work Product.
Description: Statement of Agreement between the parties
Sample language:
By signing and returning an executed copy of this letter, you hereby acknowledge and agree as follows:
Description: No warranty or claim at law
Sample language:
We are providing the Report, and may hereafter provide you with other Work Product, as a courtesy, and nothing contained herein or in any of the Work Product shall be deemed a representation or warranty as to the Work Product, and neither you nor any of your affiliates or advisors shall have any claim at law or in equity against us, the Client or the Company or any of our respective affiliates, partners, members, officers, directors, employees or advisors by virtue of anything contained in or omitted from any of the Work Product or by reason of our having furnished any of the Work Product to you.
Description: Scope of work
Sample language:
The scope of our diligence and/or advisory work in connection with the Transaction was determined in consultation with the Client and was limited solely to matters that the Client requested us to review or analyze, and the scope of the Work Product is limited and qualified as described therein. Neither we nor the Client nor any of our respective affiliates, partners, members, officers, directors, employees or advisors makes any representation or warranty as to the accuracy, completeness or sufficiency of any of the Work Product for your or any other purposes. We note that the Report and any other Work Product are or may be subject to requests for or analysis of further information.
Description: Clarification of objectives and expectation
Sample language:
You may have different objectives, tolerances for risk, expectations, and/or views as to materiality than the Client. You should not expect that any of the Work Product will cover all issues which may be relevant to you or, with respect to the issues actually covered, with a level of depth or accuracy appropriate for In addition, certain matters have not been reviewed by us, but may have been reviewed by other consultants or advisors to, or representatives of, the Client or an affiliate thereof, and, therefore, are not included within the scope of the Report and will not be included within the scope of any of the other Work Product. Any descriptions of agreements or other matters appearing in any of the Work Product are not complete descriptions of agreements and other matters and are qualified by reference to the complete documents and records referred to thereby.
Description: Informational purposes only statement
Sample language:
All Work Product will be provided to you for informational purposes only and may not be relied upon by you or any other person or entity in any manner whatsoever. You are not our client in connection with the Work Product, and we are not providing any assurances that the Work Product is complete or accurate. In addition, we are not providing, and the Work Product should not be construed as, investment, legal or tax advice.
Description: Applicable date
Sample language:
All Work Product was or will be prepared only as of the applicable date indicated therein. We undertake no obligation to update any of the Work Product, or to consider any changes in facts or other developments of which we may have or may subsequently become aware.
Description: Non-disclosure
Sample language:
You will have no right to disclose any of the Work Product or any of the contents thereof, or any commentary, recommendations or other information contained therein, or any extract or summary therefrom or thereof, to any other person or entity without our express prior written consent.
Description: State of governing law
Sample language:
This letter shall be governed by the laws of the State of [Insert Consultant’s Preferred Choice of Law], and may be executed in any number of counterparts, each of which shall be deemed an original. Electronically transmitted copies of the signature pages of this letter shall be deemed definitively signed and delivered, and with the same force and effect as if manually signed and delivered, for all purposes whatsoever.
Description: Closing and signatures
Sample language:
Very truly yours,
[Insert Name of Consultant]
By:____________________________
Name:Title:
ACKNOWLEDGED AND AGREED
AS OF THE DATE FIRST ABOVE WRITTEN:
______________________
[Insert Name of Recipient]
By:____________________________
Name:Title:
Download the Umbrex Non-Reliance Letter Template that you can download and adapt for your consulting practice.
This templates is intended to serve as a starting point only and should be tailored to meet your specific requirements. This document should not be construed as legal advice for any particular factors or circumstances.
You should consult with an attorney regarding legal interpretation or assistance with these contracts, or if you have any questions. We offer a directory of attorneys recommended by consultants at this Resource.
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