What is it?
Doctrine of known facts; governs disclosure obligations and the enforceability of representations in contracts and statutes.
known
UCC / CommercialLegal glossary term
Quick answer
KNOWN usually means a fact that a party has identified and can prove. In contracts, it matters because undisclosed known defects can void the deal. Before signing, check that all material known facts are listed in the disclosures.
Definitions
What is known?
Legal Definition
A fact or condition that a party has identified and can prove exists under a contract or statute. It creates a duty to disclose or a right to enforce, depending on the clause. The most critical qualifier is whether the fact is "materially known" to the other side.
Plain-English Translation
Imagine a kid signs a hall pass that says they already know the library is closed; the pass works only because the kid is aware of the rule.
Contract relevance
Why known matters in contracts
Failing to treat a known fact correctly can void a contract or trigger a breach claim, and the seller usually bears that risk.
Document context
Where known appears in documents
| Document type | Section | Why it matters |
|---|---|---|
| UCC Sale of Goods Contract | Section 2-313 | Warranty of merchantability relies on known product condition |
| ISDA Master Agreement | Schedule | Known events trigger credit support annex adjustments |
| SEC Prospectus | Risk Factors | Known regulatory investigations must be disclosed |
| Loan Agreement | Representations and Warranties | Known liabilities affect covenant compliance |
Contract language
Common contract wording
| Contract wording | Plain-English meaning | What to check |
|---|---|---|
| "Seller has disclosed all known defects" | All defects the seller is aware of are listed | Verify the list is complete and up‑to‑date |
| "Borrower represents no known pending litigation" | Borrower claims no lawsuits are on the horizon | Confirm with a background check |
| "The Company has no known material adverse changes" | No significant negative events are known | Cross‑reference recent filings |
Red flags
Red flags to watch for
Wording examples
Clearer wording examples
Vague wording
"No known issues"
Clearer wording
"No material defects known to the seller as of the signing date"
Vague wording
"No known defaults"
Clearer wording
"The borrower has not received any default notices as of March 1, 2026"
Note: “clearer” means easier to read — not legally reviewed or guaranteed safe.
Pre-signature checklist
What to check before signing
1
Ask for a written list of all known defects or liabilities
2
Confirm the definition of "known" in the contract
3
Check for any recent notices or filings that might indicate unknown issues
4
Verify that disclosures are signed and dated
5
Ensure the cure period for undisclosed known facts is reasonable
6
Ask whether materiality thresholds are defined
7
Request representations to be qualified by specific dates
Party impact
How known affects each party
| Party | What this party should check |
|---|---|
| Seller | Must compile and disclose every material fact it knows |
| Buyer | Should review disclosures and conduct independent verification |
| Lender | Needs to confirm that known defaults are accurately reported |
Comparison
known vs similar terms
| Related term | Plain meaning | Main difference from known |
|---|---|---|
| Disclosure | Providing known information to the other side | Disclosure is the act; known describes the information itself |
| Misrepresentation | False statement of fact | Misrepresentation involves a known falsehood, while known can be true or false |
| Materiality | Significance of a fact | A known fact is only actionable if it is material |
Missing or vague
If known is missing or vague
If "known" is left undefined, parties may argue over what qualifies as a discoverable fact. The seller could claim ignorance while the buyer asserts a breach. Courts often look to industry standards to fill the gap, leading to costly litigation. Ambiguity invites disputes over the scope of required disclosures.
Document map
Document section map
| Contract section | What to inspect |
|---|---|
| Definitions | Look for how "known" is defined or qualified |
| Representations & Warranties | Check for statements of known facts |
| Disclosure Schedule | Verify that all known items are listed |
| Cure Period | Ensure timelines for correcting undisclosed known facts are clear |
Visual model
Understand known fast
An explainer image has not been generated for this term yet.
01
Landlord discovers a leaky roof before lease signing and informs the tenant, avoiding later repair disputes.
02
Borrower knows a pending lawsuit against their company and discloses it in the loan application, allowing the lender to adjust terms.
03
Franchisor is aware of a pending zoning change and includes the risk in the franchise disclosure document.
Document context
How known shows up in legal documents
Why does it matter?
Failing to treat a known fact correctly can void a contract or trigger a breach claim, and the seller usually bears that risk.
When does it matter?
When a party learns of a material condition before signing or within the cure period set by the agreement, the obligation to disclose arises.
Where is it usually seen?
Standard in UCC § 2-313 warranty clauses, ISDA master agreements, and SEC Form S‑1 prospectus risk factors.
Who is affected?
Seller must disclose any known defects; buyer gains the right to rescind if the seller hides a known problem; lender can enforce a known default clause against borrower.
How does it work?
First, the party identifies the material fact. Then, they disclose it in writing within the time frame the contract mandates. Finally, the other side acknowledges receipt, creating a record that the fact was known.
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Wikipedia
External reference for known
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Where known connects to real contract work
This layer links the term to nearby glossary entries, document use cases, and contract-risk guides so readers can move from definition to context without dead ends.
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Source & disclosure
This page is an AI-assisted plain-English explanation based on LexPredict Legal Dictionary context and contract-review patterns. It is not legal advice. Meaning may vary by jurisdiction, industry, and exact clause wording.
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