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The NDA can not only limit with whom the potential buyer can share information but also prevent a prospective buyer, who may be a competitor (either now or in the future), from using the target company's Confidential Information for any objective apart from what has been specified in the NDA.
The agreement will name the party or parties involved, the items subject to non-disclosure, the duration of the agreement and the obligations of the recipient(s) of confidential information.
The objective of an NDA in this case is to ensure that sensitive details remain within the boardroom. This can include information such as a pitch deck or financial information. Founders might also wish to avoid any conflicts of interest with the investor's existing portfolio companies in the same industry or sector.
Key Takeaways. An NDA acknowledges a confidential relationship between two or more parties and protects the information they share from disclosure to outsiders. The NDA is common before discussions between businesses about potential joint ventures.
Confidentiality of Agreement Each Party agrees that the terms and conditions, but not the existence, of this Agreement will be treated as the other Party's Confidential Information and that no reference to the terms and conditions of this Agreement or to activities pertaining thereto may be made in any form of press ...
compete agreement is only used between an employee and a business to specify who may hire them should they leave the company. An NDA is much broader and is used to protect any personal or businessrelated information that one or both parties want to remain confidential.
Non-disclosure of party's interest in the transaction. Many buyers do not want the seller to disclose to others their interest in purchasing the business in question. They would therefore want the NDA to keep confidential the buyer's identity and the fact that discussions are taking place with the seller.
disclosure agreement (NDA), also known as a confidentiality agreement, is a legally binding contract in which one party agrees to give a second party confidential information about its business or products and the second party agrees not to share this information with anyone else for a specified period of time.