Series 79: Confidentiality Agreement

Confidentiality Agreement

The confidentiality agreement (CA) is a contract between the target and a prospective buyer. The CA, also known as the non-disclosure agreement, limits the prospective buyer’s ability to disclose or share the target’s confidential information. The scope of the CA varies depending on what type of company the target is and what trade secrets or specific confidentiality concerns it may have, but virtually every company possesses some information it would prefer to keep private. In some cases, the seller may consider the bare fact that it is up for sale to be confidential information.

While the teaser is typically provided to interested buyers without restriction, the CA is distributed to, and should be signed by, prospective buyers before the seller discloses any truly confidential information. The seller should keep in mind that a breach of the confidentiality agreement may be very difficult to prove. If the target or the target’s advisors are uneasy about