Confidentiality & Non-Disclosure Agreement

What is a Confidentiality or Non-Disclosure Agreement

This contract may often take the form of a "letter agreement" between a prospective buyer of a business and the prospective seller of a business (or of a unique business asset). The prospective buyer wants a "free-look" at the prospective seller's proprietary or confidential business records before it will enter into a letter of intent, or an asset purchase agreement, or a stock sale agreement. But for very good reasons, the prospective seller doesn't trust the prospective buyer with this information without significant contractual covenants binding the prospective buyer against the unauthorized use or dissemination of the seller's proprietary or confidential business records. It goes without saying, there is considerable risk to be borne by the prospective seller under these circumstances. The prospective seller must recognize that it may be forced to file a lawsuit to enforce the agreement, a very expensive proposition.

Concerns related to a Confidentiality or Non-Disclosure Agreement

The prospective seller must be in complete control of the drafting, scope, and content of the confidentiality and non-disclosure agreement. Know who you are dealing with, and if in doubt, don't permit outside access to your proprietary or confidential business records.

I assist clients in the negotiation and preparation of confidentiality and non-disclosure agreements.