When considering selling their companies, many owners become paranoid regarding the issue of confidentiality. They don't want anyone to know the company is for sale, but at the same time, they want the highest price possible in the shortest period of time. This means, of course, that the company must be presented to quite a few prospects to accomplish this. A business cannot be sold in a vacuum.
The following are some of the questions that a seller should expect a confidentiality agreement to cover:
What type of information can and can not be disclosed?
Are the negotiations open or secret?
What is the time frame for which the agreement is binding? The seller should seek a permanently binding agreement.
What is the patent right protection in the event the buyer, for example, learns about inventions when checking out the operation?
Which state's laws will apply to the agreement if the other party is based in a different state? Where will disputes be heard?
What recourse do you have if the agreement is breached?