Facts about the Purchase or Sale NDA template

Contents

What is a Purchase or Sale NDA?

A purchase or sale NDA is a type of nondisclosure agreement used when a party wants to keep information about a transaction confidential. Using an NDA allows one or both parties to disclose information that is related to the transaction without worrying about whether that information will be shared. Therefore, information can be shared more freely which can aid the transaction. In many cases, proceeding with the transaction would be unfeasible without a nondisclosure agreement.

Typically, this will only be used for a relatively complex sale in which some of the relevant information is not publicly available. So, a business would not typically request a purchase or sale NDA from a customer for a routine order. However, if that business were selling some intellectual property or asset that has confidential information, the parties may agree to a non disclosure agreement.

When signing a purchase or sale NDA, the receiving party agrees not to share, copy, modify or use the confidential information in any way not authorized by the disclosing party. Depending on the transaction, both parties may be receiving and disclosing parties (a mutual purchase or sale NDA). A nondisclosure agreement will also clearly establish which party owns the confidential information. This is especially important for cases of intellectual property.

What is a Purchase or Sale NDA used for?

A party in a transaction may request a purchase or sale NDA when sharing business records, financial information, trade secrets, technical data, contract details, financial information, or similar non-public data. This type of NDA is most commonly used when one party is selling all or part of a business, intellectual property, major assets, trade secret, or something similarly complex. It can provide protection from the buyer using or sharing the confidential information if the deal falls through. Additionally, it ensures that the sales price and other sensitive information are protected by the seller if the sale is completed.

Why should you use a Purchase or Sale NDA form?

Complex business transactions involve a lot of sensitive and valuable information. Having a purchase or sale NDA in place can help to protect the interests of both parties before, during, and after the transaction.

Like many other legal documents, a purchase or sale NDA is only as effective as it is well-written. It needs to be specific and clear. Therefore, using a template makes a lot of sense. It is easier to ensure that your purchase or sale NDA covers all the bases it needs to. Additionally, a template can help you avoid straying into any ambiguity or inaccurate language that would make the agreement unenforceable.

Using a template also makes the writing process easier and faster. In short, using a purchase or sale NDA template means that you can spend more time focusing on the deal and less time on the document.

How to write a Purchase or Sale NDA

If using a purchase or sale NDA template, this type of agreement is surprisingly easy to write. The most important element is making sure you properly define what is and isn’t confidential. Here are a few of the pieces that should be in every purchase or sale NDA:

  • Parties:

    The agreement needs to identify who is the disclosing party and who is the receiving party. In some cases, both parties can be disclosers and receivers.

  • Confidential Information:

    The document should specify what types of information are being protected. For example, this may include financial details and product specifications. Try to be as specific as possible (without including the actual confidential information) in the agreement. Doing so will make it legally stronger.

  • Exclusions:

    There should be a clause excluding certain types of information. This is usually boilerplate and lists public domain, information already known by the receiver and similar elements.

  • Term:

    The agreement should have some timeframe or other termination conditions. For example, it may expire after the transaction is completed.

  • Obligations:

    You should explain what is expected of each party. This is often that the receiver should not use, share, copy or otherwise disclose the information without the express written consent of the discloser.

  • Signatures:

    Both parties need to sign the document before it takes effect. However, it is usually not necessary to get it notarized or witnessed.

How to Fill Out a Purchase or Sale NDA with PDFSimpli in Five Steps

  • 1. Prepare:

    Before starting to write your purchase or sale NDA, make sure you have all the relevant party details including addresses and legal names. Additionally, spend some time defining the included and excluded confidential information. As mentioned above, a well-written confidential information section can make your agreement stronger.

  • 2. Choose Software:

    Next, select a template and software. Consider using PDFSimpli. It has a large catalog of templates for nondisclosure agreements and other business forms. You can open the in the online editor and make whatever changes you need. Plus, you can save to the cloud as you go. It is an easy way to make a purchase or sale NDA.

  • 3. Fill Out or Edit the Purchase or Sale NDA:

    Open the purchase or sale NDA in the PDFSimpli online editor. Using that, you can fill in all the relevant fields. Additionally, you can edit whatever terms you like to suit the unique requirements of your transaction. There are also image, drawing and watermarking tools to add extra details to your document.

  • 4. Review:

    Before signing the document, it is a good idea to review it carefully to ensure that it covers the information you want it to. Remember, any information not included in this document may be considered fair game. Consider printing the document with a watermark to aid in your review process. You can also easily proofread the agreement in the online editor.

  • 5. Save, Download, Print or Send for Signature:

    Finally, it is time to sign the document. You can add your signature online by uploading, drawing or typing a signature in PDFSimpli. Then, send it to another user to sign. Alternatively, you can print the document directly from the editor to sign the old-fashioned way. If you prefer, save the agreement for later or download it to your computer.

Purchase Or Sale NDA Frequently Asked Questions

No, to be enforceable purchase or sale NDAs must have limits to them. This includes either a specified term, conditions of termination or combination. The conditions of termination must be inevitable (you can’t say it will expire when pigs fly, for example). Additionally, the time limit must be reasonable. This is usually a matter of months or years. Five years is often considered to be a rough maximum.

Information that the other party already had access to cannot be protected by a purchase or sale NDA, even if you consider it confidential. So, if you accidentally disclose something beforehand, you may not be able to protect it with an NDA. Similarly, the document cannot protect information that the receiving party discovers through other means such as a third party disclosing it or the disclosing party making it public knowledge.

Ideally, your purchase or sale NDA should be as specific as it reasonably can be. So, you should include the specific types of information that will be disclosed that will be considered confidential. While there is a level of specificity that is overly burdensome, the more specific it is, the more likely a court will enforce the agreement.

Sources: