NDA business sale (long)
Long form confidentiality agreement for use where a seller will disclose confidential information relating to the business of the seller being sold to a potential buyer
Background
Why use Confidentiality Agreements?
Confidentiality Agreements (also known as NDAs) are used in corporate and commercial transactions as a preliminary agreement to enable parties to disclose confidential information prior to them discussing the main transaction.
By first entering into an NDA, the parties can exchange confidential information with each other with the assurance that, if the negotiations on the main transaction break down, the confidential information which has been disclosed will be protected by a legally enforceable agreement.
About this Confidentiality Agreement
This Confidentiality Agreement is for the one-way disclosure of confidential information by a seller to a potential buyer of the seller’s business and assets. Protections are generally for the benefit only of the seller as the discloser and owner of confidential information. The document is a long form agreement and contains relatively strong legal protections for the benefit of the seller.
Which provisions of this NDA might require negotiation?
There are several provisions of this NDA which the potential buyer may find difficult to accept and want to negotiate. These include:
- non-solicitation covenants restricting the buyer from soliciting the target seller’s employees
- a contractual indemnity for breach by the buyer of the confidentiality obligations
- the duration of the agreement
The explanatory guidance notes which accompany the document explain how these provisions might be negotiated between the parties to achieve an agreed position between them.
Document features
Features include:
- 17 clauses over 9 pages
- Definition of Confidential Information
- Confidentiality obligations
- Permitted recipients to whom Confidential Information may be disclosed by the buyer
- Circumstances in which compulsory disclosure may be made by the buyer
- Return of Confidential Information to the seller
- Restriction on soliciting (poaching) the seller’s employees
- Rights and remedies for breach of confidentiality obligations, including contractual indemnity in favour of the seller
- Duration of agreement
Explanatory guidance
As with all of our document templates, your purchase will include access to clear explanatory guidance on the document and its use.
Alternative Confidentiality Agreements
For a shorter form of confidentiality agreement for a business sale transaction, see NDA: business sale (short).
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