Are there any unusual NDA items that's caused you from looking at a deal?

October 07, 2021

by a searcher from Towson University in Portland, OR, USA

I would love for this process to be generically-templatized. I sometimes wonder if I'm even being overly cautious by reading the full contents of each NDA...

Any Searchers out there who have seen strange items on an NDA that caused them to pass on even looking at a CIM?

Please don't share Brokerages or Broker names, I'm not trying to start a fight in the comments.

Just curious if there are any items that are worth watching for or pushing back on.

Reply by an investor
from Indiana University at Bloomington in Austin, TX, USA

Yes, I ran across an NDA from a broker which stipulated if I walked away after putting a deal under LOI that their full commission would be due from me, the buyer. Another time, I came across a term in the NDA that stipulated that I/ we would be barred from doing business with any of the sellers suppliers and vendors. A challenge when you're running a roll up which includes acquiring vendors in a small, niche market. They ultimately removed that clause.

Reply by a searcher
in Lilongwe, Malawi

I always sign NDA's because I see their main purpose being to keep the details of a potential acquisition confidential. Even if there might be some clauses in the NDA which are not palatable to you I don't think that should stop you from signing the NDA.

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