Sellers and Buyers want to negotiate, but need to protect themselves in the event a deal is not completed. The Non-Disclosure Agreement, or NDA, is the key to opening meaningful conversation, while protecting valuable interests. There are several topic areas you should expect to address in an NDA, though Sellers and Buyers each have their own perspective as to the key points they want in the agreement.


An NDA is a critical protection for Sellers. It is their opportunity to protect their valuable confidential information as they strategically share with a potential Buyer enough information to make a meaningful offer. Within the NDA, Sellers will typically focus on:

  • Broad definition of confidential information
  • Clear prohibition on use or disclosure of confidential information
  • Buyer’s responsibility for disclosure or use by the Buyer’s representatives
  • Buyer to return all confidential information immediately upon the Seller’s demand (which may also include the obligation to destroy copies of information)
  • Clear and strong remedies in the event a Buyer disregards the promises of the NDA, including provisions for court-ordered injunctions and payment of the Seller’s attorney fees
  • Clear statement of applicable law and jurisdiction(s) in which the agreement may be enforced
  • Clarification that the Seller is not making any representations or warranties about confidential information
  • Prohibiting the Buyer from soliciting to hire key employees of the Seller


Buyers are anxious to see the Seller’s information and evaluate the prospect of a potential deal, but are generally agreeable to and understanding of the Seller’s need to protect its confidential information. However, Buyers will typically want to ensure that:

  • NDA does not unfairly prejudice the Buyer’s other activities
  • Clarify what is not confidential information (for example, information that is generally available to the public or that the Buyer has obtained without any “bad acts”)
  • Clarify right to disclose subject to a subpoena or court order, balancing the Buyers’ risk of not responding, while protecting the Seller’s rights to intervene to protect its valuable information

Sellers and Buyers

Both parties may benefit from clarifying within the NDA that:

  • Sharing information does not require either of them to make or accept any offer from the other or even to continue negotiations after a point where they have determined that the deal is not right for them
  • Confirm that their agreement will not be amended, except by mutual agreement
  • Confirm that their written agreement supersedes any preceding general discussions

Every M&A transaction starts with sharing information. Whether you are a Buyer or a Seller, you will want to make sure that your interests are protected with a well-crafted NDA. The Mergers and Acquisitions Team at Rhoades McKee is happy to help you with all of your Non-Disclosure Agreement needs.

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