The call I want to start with came in last spring — and it was, at its core, a disclosure schedule update bring-down problem. A target’s general counsel was preparing for closing on a sponsor-backed M&A transaction with a sign-to-close window of about ninety days. Three weeks before scheduled close, a mid-tier customer of the target had given notice of non-renewal of an MSA that, under the schedule the seller had delivered at signing, was scheduled to extend through the following fiscal year. The non-renewal was lawful, the customer was unhappy with a price-increase letter the target had sent in the ordinary course, and the contract had not been one of the deal’s top-five revenue concentrations. The general counsel called to ask the most common question I get from sellers in the sign-to-close window: do we update the schedule, or do we leave it alone?
The answer turns on the disclosure-schedule update mechanism the parties had negotiated four months earlier. In that particular deal, the answer was that updating the schedule would not, by its terms, cure the breach of the bring-down condition the customer’s non-renewal had triggered. The buyer’s counsel had quietly stripped the cure-language during the second-round markup — a five-word edit on page 47 of an eighty-page agreement. The seller’s counsel had not flagged it. The seller spent the following ten days renegotiating a closing-purchase-price reduction that landed in the low single-digit millions, against a hold-back the buyer had been threatening to walk.
The disclosure schedule update mechanism is one of the most quietly important pieces of architecture in any sign-to-close M&A deal, and the 2026 markup pattern from buy-side counsel is shifting it in ways that sophisticated sell-side practitioners need to be tracking. The companion question — bring-down versus bring-forward and which party bears new-information risk — sits one provision over and travels with this one. The post that follows is the practical and doctrinal version of the conversation I have been having with sellers and their counsel since the year’s first wave of repriced and walked deals started landing in February.
What the disclosure schedule update bring-down mechanism controls
Every purchase agreement that contemplates a sign-to-close gap allocates a particular form of risk: the risk that, between signing and closing, facts that would have required disclosure on a schedule at signing will arise or become known. The seller’s reps at signing — the rep about material customer relationships, the rep about pending litigation, the rep about regulatory compliance — were true as of the signing date. The bring-down condition requires those reps to be true again at closing, subject to whatever materiality and bring-down qualifiers the parties have negotiated. If a new material fact has arisen, the question is whether the seller can update the disclosure schedule to reflect the new fact and thereby satisfy the bring-down, or whether the update merely documents a breach without curing it.
Three drafting patterns are common. The full-cure version allows the seller to update the schedule at any time before closing, with the updates serving for purposes of indemnification and for purposes of the bring-down condition. The no-cure version allows updates for indemnification purposes only — the buyer’s post-closing recovery is shaped by the schedule as updated, but the closing condition is measured against the schedule as it existed at signing. The middle pattern, which is the one most middle-market deals end up with, carves out specified categories of update from the cure mechanism — for example, allowing cures for changes that occur in the ordinary course and that are not the result of seller breach, but not allowing cures for changes that materially affect the value of the target or the buyer’s closing economics.
The Delaware case law on these provisions is not extensive, but the basic doctrine is settled. Beginning with then-Vice Chancellor Strine’s opinion in In re IBP, Inc. Shareholders Litigation, 789 A.2d 14 (Del. Ch. 2001), and continuing through Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347 (Del. Ch. Oct. 1, 2018), and AB Stable VIII LLC v. Maps Hotels and Resorts One LLC, 268 A.3d 198 (Del. 2021), the Court of Chancery and the Delaware Supreme Court have treated the parties’ allocation of risk via the closing conditions as enforceable on its terms, including the allocation embedded in the disclosure-schedule update mechanism. A buyer who has negotiated for a no-cure regime gets that regime. A seller who has signed into a no-cure regime cannot rewrite it under the doctrine of substantial performance or under any equitable doctrine the Court of Chancery has shown willingness to deploy in the closing-condition context. The drafting is the deal.
What buyers are doing to the bring-down in 2026
The shift visible across the deals I have papered this year has three components.
The first is a push from the full-cure default toward the no-cure default. Five years ago, the unannotated assumption in middle-market deals was that the seller could update the schedule between signing and closing and that those updates would satisfy the bring-down. The current default, particularly in sponsor-backed transactions and in any deal involving a target with regulatory exposure, is that updates are for indemnification only. Sellers who do not push back on the change are signing into a regime under which any post-signing development triggers a bring-down failure and a closing-condition fight, regardless of how minor or ordinary-course the development is.
The second is the narrowing of the carve-outs that survive the no-cure regime. Even where the deal preserves an ordinary-course carve-out — allowing the seller to update for matters that arise in the ordinary course of business consistent with past practice — the definition of “ordinary course” is moving. The 2025 wave of post-AB Stable VIII LLC v. Maps Hotels and Resorts One LLC, 268 A.3d 198 (Del. 2021), drafting put pressure on what counts as ordinary course in deals where the underlying business has any cyclicality or any pandemic-era anomaly in the comparable period. Buyers are now drafting around a narrower “ordinary course consistent with the target’s practices during the twelve months immediately prior to signing” formulation that, in practice, captures fewer post-signing events than the older formulation.
The third is the cleanup of the buyer’s walk economics. Most sophisticated agreements pair the bring-down condition with a buyer materiality qualifier — the buyer can walk only if the breach gives rise to a material adverse effect on the target or, in some formulations, on the deal economics. The 2026 markup pattern is to add a second prong: the buyer can walk if either the breach rises to MAE level or if the breach involves a category of rep that the agreement defines as “fundamental.” The fundamental-rep list typically includes more than just the title and authority reps that have historically been called fundamental — it is creeping outward to include material-contract reps, customer reps, and increasingly, IT-system and AI-tooling reps. A breach of a fundamental rep, without an MAE qualifier, becomes a walk lever that the no-cure regime makes available to the buyer in a wider band of circumstances than the seller’s deal team anticipated at signing.
The leverage problem
The reason this matters operationally is the asymmetry between what the buyer needs to do at closing and what the seller needs to do at closing. The buyer needs to either close or not. The seller needs the buyer to close. Once the bring-down condition has failed — as the no-cure regime makes more likely — the buyer has the option to walk or to use the threat of walking to renegotiate price. The seller has neither option. The deal that walks is rarely a deal the seller can put back together at the same price, and frequently a deal that the seller cannot put back together at all.
The result, in practice, is that even technical bring-down breaches that no party seriously contends amount to an MAE produce material repricing events in the closing week. The buyer’s leverage is the contractual option not to close. The seller’s posture is to make whatever concession is necessary to convert the option back into actual closing. That dynamic is visible in the negotiation styles I have seen from several institutional buy-side counsel in 2026 — the closing-week call has stopped being about coordination and started being about reopening price.
Ethan Klingsberg’s 2026 M&A predictions and guidance on the Harvard corporate governance forum flagged the intensification of regulatory risk-allocation negotiations — higher reverse termination fees, longer outside dates — as a dominant theme of the year. The same intensification is visible one provision over, on the bring-down side. The disclosure-schedule update mechanism is where that friction gets engineered into the agreement at signing. By the time the closing-week call happens, the leverage has already been distributed by what the parties signed in February.
What the sell-side drafting move is
The sell-side response is not to refuse the no-cure regime outright — the buy-side institutional preference for that regime has hardened to the point where a flat refusal will burn capital that the seller will need elsewhere. The response is to negotiate the carve-outs aggressively.
First, preserve a real ordinary-course carve-out. The definition of ordinary course should not be narrowed to a twelve-month look-back. Sellers should hold the line on a multi-year look-back or, alternatively, on a carve-out that allows updates for any matter that arises in the ordinary course of business of similarly-situated businesses in the same industry. Industry context preserves the seller’s ability to update for events that are normal at the industry level even if the target’s own twelve-month history happens not to include a comparable instance.
Second, demand a cure period on bring-down conditions. The clean version of the agreement allows the buyer to refuse to close only if the breach has not been cured within a stated number of business days — typically ten to thirty — after notice. The 2026 markup pattern is to strip the cure period or to limit it to monetary breaches. Sellers should push to preserve the cure period across the board, including for disclosure-schedule update events that can be remediated — for example, a customer non-renewal that can be replaced with a substitute customer relationship before the outside date.
Third, push back on the fundamental-rep creep. The list of reps that constitute fundamental reps should be limited to the reps that genuinely go to the buyer’s acquisition of valid title to the target — capitalization, organization, authority, brokers’ fees. The expansion to material-contracts, customer-relationship, or IT-systems reps should be resisted. A material-contract rep at the fundamental level converts every disclosure-schedule update event in that area into a potential walk lever, which is the architecture this post is warning against.
Fourth, decouple the indemnification update from the closing-condition update. The seller should retain the right to update the disclosure schedule for indemnification purposes at any time, even where the closing-condition mechanic is no-cure. That update preserves the seller’s post-closing indemnity exposure profile and prevents the buyer from using closing-week disclosure-schedule developments as both a closing-leverage event and a separate post-closing claim. Where a representations and warranties insurance policy sits behind the indemnity, the policy’s treatment of post-signing schedule updates should be diligenced in the same sitting — the carrier’s exclusion language frequently does not track the agreement’s cure mechanic. The seller-friendly versus buyer-friendly framing of the closing conditions is where the negotiation actually happens.
What sophisticated sellers are tracking at the term-sheet stage
Disclosure-schedule update mechanics rarely appear in a term sheet. They should, in 2026, at least at the principle level. A term sheet that says “Bring-down conditions to permit ordinary-course updates and to provide a thirty-business-day cure period for breaches subject to cure” is a one-sentence provision that constrains the buyer’s drafting in the first round of the definitive. It is a sentence that few sellers think to negotiate at term-sheet stage and that most buyers will accept if presented as a market term.
For deals already in markup, the sell-side review should treat the disclosure-schedule update language, the bring-down condition, and the fundamental-rep list as a single integrated section. A change in one of those provisions almost always implies a change in the architecture of the other two. The buyer’s counsel who has stripped the cure period on the bring-down has frequently also narrowed the ordinary-course carve-out and expanded the fundamental-rep list. The integrated review surfaces the architecture; reviewing each provision in isolation does not.
The doctrinal floor
Two doctrinal points deserve a brief note. Delaware’s approach to negotiated closing conditions in arm’s-length M&A is heavily contractarian — the parties’ bargain controls and the Court of Chancery has been reluctant to deploy equitable doctrines to soften it. The IBP, Akorn, and AB Stable line is consistent on that posture even where the outcomes for buyer and seller cut in opposite directions. IBP ordered the buyer to specifically perform a deal it had tried to walk; Akorn let the buyer terminate on an MAE and regulatory-rep breach; AB Stable upheld termination for breach of an ordinary-course covenant. The common thread is that the agreement, read as a sophisticated commercial document, governs. A seller that signs into a no-cure regime with narrow ordinary-course carve-outs and an expansive fundamental-rep list does not get a judicial reset of those terms.
The implied covenant of good faith and fair dealing, while available in principle, is a narrow gap-filler in Delaware and has not been a useful seller theory where the closing-condition mechanism is express. The Court of Chancery’s recurring reading — reaffirmed in the implied-covenant decisions of the last several terms — is that there is no gap to fill when the agreement allocates the relevant risk on its face. A buyer who exercises a contractually-bargained right to refuse to close has not breached the implied covenant by doing so, even where the seller can argue that the parties’ pre-signing expectations contemplated closing on the original terms. The implied covenant does not rescue a seller from the closing-condition mechanism it signed.
The practical implication is that the protection the seller needs is at signing, not at closing. The post-closing audit of the closing-condition mechanism is the second-best outcome — it tells the seller what went wrong but does not change the result. The first-best is the sell-side counsel who reads the bring-down condition, the disclosure-schedule update language, and the fundamental-rep list in their integrated form and negotiates the architecture before the agreement is signed. The same negotiating mindset that founders need on the post-closing stockholders’ agreement applies here on the sign-to-close architecture, and for the same reason: the drafting is the deal.
The takeaway
The disclosure-schedule update mechanism is not boilerplate. In 2026, it is one of the highest-leverage pieces of architecture in any sign-to-close agreement, and it is moving in a direction that systematically transfers walk and repricing leverage from sellers to buyers. The sell-side counsel who is not affirmatively negotiating this architecture is letting the buyer write it. The result, by the time closing week arrives, is a deal in which the buyer has options the seller did not realize the buyer had.
If you are sell-side counsel or a deal principal looking at a 2026 markup and want a second read on the disclosure-schedule update architecture, the bring-down conditions, or the fundamental-rep list, feel free to reach out to my firm manager, Magda, at Magda@montague.law, or fill out our contact form. Mention you read this post.
