We encourage our clients’ legal counsel to draft Non-Disclosure Agreements (NDAs) that strike a delicate balance between “protective enough” and “close to market”.
“Close to market” means terms and conditions that are usually acceptable to buyers of companies in the middle market of the aerospace and defense industry. Given that we have been party to our clients’ negotiations of more than 100 NDAs in the past three months, we have a keen awareness of what terms are, and are not acceptable to buyers in this market.
“Protective enough” means the agreement provides sufficient protection of the confidential information of the seller, including but not limited to enhancing the seller’s ability to successfully litigate against a potential buyer for using the confidential information in ways that harm the seller.
When an NDA is well balanced, it protects the seller sufficiently and it enables buyers to sign them with little or no negotiation, saving both time and legal fees for the seller. Conversely, when an NDA is too protective and has terms and conditions that buyers will not accept, it leads to extensive negotiations of each NDA, and that costs the seller both time and money.
Have a great day everyone.