NDA Sample

January 03, 2024

by a searcher in Miami, FL, USA

Hello Everyone,

We have recently encountered a challenge with the NDA when it comes to purchasing businesses. Initially, we provided the business owner with a simple NDA. However, the attorney representing the business owner expressed concerns about its strength. As a result, they have sent us an NDA that is excessively strict and includes a Non-circumvention clause.

If anyone has a reliable NDA that they use when presenting to business owners and would be willing to share, we would greatly appreciate it.

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Reply by a searcher
from University of Tennessee in Nashville, TN, USA

Thanks for the tag ^redacted‌ and Happy New Year!

Most NDAs have similar language and protections in order to incentivize/deter the parties from harming one, the other, or both. As shared above, there is no 'one-size-fits-all' NDA that would satisfy the Seller's counsel. Lawyers are hired to offer legal advice and protect their clients. Controlling the communication channel is one way that they think helps them achieve that objective.

I would have a direct conversation with the Seller, without the attorney, expressing your concerns regarding the language of the NDA and reminding the Seller that, despite his/her attorney's intent, he/she dictates to the attorney how to proceed. You highlighted a non-circumvention clause and this, too, would be a point of contention given that it appears that the attorney was contacted AFTER you made contact with the Seller directly.

Last point of advice: be willing to walk away. There are other fish in the sea and more willing to swim to you than away from you. Attorneys only aid or hinder a transaction. Generally, the more they are involved, the higher their bill.

Reply by an intermediary
from California State University, San Bernardino in Stratton, CO 80836, USA

^redacted‌ Since I typically represent the sellers, I usually insist on our NDA to start but allow the buyer to propose modifications, which we pass by the client's attorney for yea/nay or adjustments in return. I usually expect redline adjustments from PE and larger companies. Typically, there is a give-and-take, but sometimes, we cannot agree on the redlines and move on. So, it shouldn't surprise the attorney if you send them their NDA marked up on the points you want changed. Moving on to the next opportunity would be safe if they don't budge. If they cannot negotiate the NDA, I might question how flexible they will be during other negotiations. Just make sure your redlines make sense otherwise, you risk looking like you will be a problematic, unrealistic buyer. Welcome to the M&A first date. ^redacted‌ thanks for the tag.

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