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Non Disclosure Agreement – with proposed Business Buyer

Home / Non Disclosure Agreement – with proposed Business Buyer

Non Disclosure Agreement – with proposed Business Buyer


Growth is the essential part of every businessman life and every businessman intends to not to limit or restrict himself/ herself to the selected particular field but want to increase its area of operations. Whenever the business of any company grows, they intend to increase their control in the market by taking over other competitor business or business of some related field. However, acquiring the business is only the one side of the coin sometimes it also happens that business goes into such a situation where a part of the business, which needs more specialization, is to be sold.

Further while entering into sale or purchase of the business, there are so many confidential information and documents on the basis of which decisions are taken by the businessmen.

Hence, it is very much important to protect the rights with regard to the sharing of confidential information in the interest of such a business transaction. One must know the essential clauses to be inserted in the Non-Disclosure Agreement for Business Purchase or acquiring any business so as to preserve and protect at least the basic right of the parties involved.


  1. Define Confidential Information: It is very essential for the Owner (Seller) to decide what should be construed as Confidential Information.
  2. Disclosure of Confidential Information: Being confidential in nature, every confidential information shall not be disclosed to anyone. The provision for nondisclosure should be stated specifically. It should be clearly stated that with whom such information can be shared and to what extent.
  3. Duration of the Agreement: The agreement shall also specify the duration for which the Parties shall be bound by the agreement. One cannot bind a person for the entire life. The duration needs to be for a specific period.
  4. Exception: There are certain cases when disclosure of information shall not be constructed as a breach of Agreement :
    • Information which at the time of disclosure is in the public domain; or
    • Information which, after disclosure, becomes a part of the public domain by publication or otherwise, except in breach of this Confidentiality Agreement; or
    • Information which either party can establish was in its possession prior to disclosure or was subsequently and independently developed by employees of or behalf of either party without use, direct or indirect, or information required to be held confidential hereunder, and who had no knowledge of the Information disclosed; or
    • Information that either party shall receive from a third party, provided however that the third party has the right to disclose the Information to other parties; or e. Information which is required by law to be disclosed, provided that the party required to disclose shall give the other party written notice thereof and adequate opportunity, if practicable, to contact a government entity to object to any disclosure or to request confidential treatment thereof.
  5. No Representation, Warranty or Guarantee: The information so disclosed shall not construe any representation, warranties or Guarantee on behalf of the Seller or Disclosing Party and the Receiver shall rely on such information at its own discretion.
  6. Properties of the Parties: All Confidential Information disclosed pursuant to the NDA shall be and remain the property of the Disclosing Party. It shall not be in any manner considered as granting or conferring any rights whatsoever (including without limitation any intellectual property rights), whether expressly, impliedly or otherwise, in respect of the Confidential Information to the Receiving Party.
  7. Handover of Documents: The Owner shall ensure to handover all the original documents to the receiver on receipt of full and final payment. The Receiver is entitled to receive all documents and assets of business without being tampered.
  8. Unauthorized Disclosures: In case receiver disclosure some information which should not be expected from him, then in such a case, he must inform such unauthorized disclosure to the Owner of information, so that timely remedial action can be taken.
  9. Notices: The address of both the parties where all communication/ notices to be delivered to the Parties needs to be stated specifically in the agreement.
  10. Breach of Agreement: The agreement should state the consequences of a breach of the agreement by the Parties. Also, the circumstances wherein it shall not be construed as a breach of the agreement.
  11. Indemnification Clause: In case of breach, the indemnification clause ensures recovery of loss incurred from the Party in Default.
  12. Disputes resolution: In case of any dispute between the Parties, option to resolve either through arbitration or through judiciary should be incorporated to in the agreement in order to protect the right of the Parties
  13. Cost for dispute: Provision for reimbursement of expenses for resolving a dispute can be added so as to avoid unnecessary dispute and also time and cost involved.
  14. Jurisdiction: The jurisdictional area where one can take legal aid needs to be stated in the Agreement. This helps to save the time of ascertainment of jurisdiction and avoids delay in seeking aid.
  15. Waiver: Unless mutually agreed in writing by the Parties, no action of any of the Party shall be construed as to waiver of any of the right entitled pursuant to this Agreement by the Parties.
  16. Severability: In the case when certain clause of the agreement becomes inoperative, for the time being in force, then in  that case only that portion which is invalid shall be severed from rest of the agreement without affecting the validity of the entire agreement
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