NDA Template for Business Sale Discussions (UK 2025)
Last updated: February 2025
When You Need This Contract
Business sale NDAs protect both the seller's confidential information during due diligence and the existence of the sale discussions themselves. A potential buyer will access the most sensitive business information including financial records, customer contracts, employee details, and legal issues. The NDA must protect this information while allowing the buyer to conduct meaningful due diligence. Standstill provisions and deal exclusivity may also be appropriate at certain stages of negotiations.
Key Clauses
- Comprehensive protection for all due diligence information shared
- Confidentiality of the existence and terms of the sale discussions
- Permitted disclosure to buyer's professional advisers with binding obligations
- Standstill and non-solicitation of the target's employees and customers
- Data room access controls and information return or destruction provisions
What to Watch Out For
- Not protecting the existence of the sale discussions, allowing the potential buyer to disclose that the business is for sale
- Failing to include standstill provisions preventing the buyer from approaching the target's employees or customers directly during negotiations
Sample Clauses
- Sample existence clause: 'The existence of these discussions, the identity of the parties, and the terms of any proposed transaction are Confidential Information. Neither party shall disclose the fact that discussions are taking place without the other party's prior written consent.'
- Sample standstill clause: 'During the period of these discussions and for [12] months thereafter if no transaction completes, the Buyer shall not, without the Seller's consent, directly or indirectly solicit or recruit any employee of the Target, or approach any customer or supplier of the Target regarding the potential transaction.'
FAQ
Should a business sale NDA be mutual or one-way?
In most business sales, the NDA should be mutual to protect both parties. The seller shares detailed business information during due diligence, while the buyer may share information about their financing, acquisition strategy, and integration plans. However, the seller typically has more at risk, so the NDA often includes additional seller-specific protections such as standstill provisions and employee non-solicitation.
What happens to confidential information if the sale does not complete?
The NDA should require the buyer to return or destroy all confidential information, including copies, notes, and analyses, within a specified period of the discussions ending, typically 14-30 days. The buyer should certify in writing that all information has been returned or destroyed. Residual confidentiality obligations should continue for the specified NDA term, typically 2-5 years after discussions end.
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Get Started FreeThis is guidance for UK businesses, not legal advice. Templates are illustrative. Consult a solicitor for complex matters.
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