Non-Disclosure Agreements

The first and most important consideration of a seller of a business should be how to protect the secrets of the business during the sale process. It is very important that sellers seek legal advice before disclosing information about a business to interested parties.

It is disturbing when sellers start negotiating the sale of their business without a signed confidentiality agreement or a non-disclosure agreement being in place. In these unfortunate circumstances it is often not possible to protect a seller from the consequences of misuse of the confidential information relating to the business.

Of course, a copyright infringement can be litigated. Also the misuse of a patent can be litigated. However, it may be more complicated to bring a successful action to protect valuable information which is not subject to copyright or a patent. Valuable information may include: client lists, financial information, pricing formulae, salaries, business plans and information about future plans.