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Contracts: what should be included in a non-disclosure agreement?

When a business in California is undergoing a merger or acquisition, it may be necessary to divulge information that would otherwise be kept confidential. However, the other party should not then use that information for its own gain or to the disadvantage of the business that divulged it. To prevent such situations from occurring, the parties might execute a non-disclosure agreement.

There are a number of elements that should be included in a non-disclosure agreement. First, the agreement should state who the parties to the agreement are. In addition, the information that is to be kept confidential should be defined. The receiving party's obligations should be described. If anything is to be excluded from being treated as confidential, this should also be included. If the party divulging the information wants the right to have it returned or destroyed, this should also be included. Finally, all terms of the non-disclosure agreement should be stated.

This is only a very brief overview of some points to include in a non-disclosure agreement. In actuality, it is important to be thorough when creating a non-disclosure agreement. For example, should there be any third parties to the agreement other than the disclosing party and recipient? How should oral information be handled? Can the disclosing party sue the recipient if the non-disclosure agreement is breached? These and more are all questions that should be considered when drafting a non-disclosure agreement.

It is important that any business contract is carefully drafted, so that it meets the needs of all parties involved. Should you be interested to speak with an attorney in our office, please call us at the Irvine office at 1-877-777-6790 to schedule a consultation. This is an advertisement for legal services. The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

Source: Forbes, "A Guide To Non-Disclosure Agreements For Mergers And Acquisitions," Richard Harroch, Oct. 28, 2017

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The information you obtain at this site is not, nor is it intended to be, legal advice. You should consult an attorney for advice regarding your individual situation. Contacting us does not create an attorney-client relationship. Please do not send any confidential information to us until such time as an attorney-client relationship has been established.

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