Are There Confidentiality Provisions In A Heads Of Terms?

There can be, but normally these provisions are contained in the Non-Disclosure Agreement (NDA) that is signed up at the same time as the HoTs.

An NDA is essential to protect against the damage that would be caused to the seller should the buyer allow secret information about the seller’s business fall into the wrong hands.

The NDA is strictly enforced. In larger share/asset sales/purchases, information is sometimes given to certain designated employees of the buying company or business, who can only disclose it to the managing director/proprietor.

We would always recommend that an NDA is considered before detailed data is shared. In some circumstances it is good practice to enter into a more detailed NDA to supplement a short form one provided by some brokers. Get in touch with us for a draft NDA.

About the Author: Martin Truman

Solicitor and Managing Director at Truelegal Solicitors: Martin has spent 25+ years advising entrepreneurs and business owners. With over 3,100 small and mid-size business sale and purchase transactions completed under his watch, he is confident that Truelegal has the toolkit to deal with most issues that buyers and sellers of UK businesses encounter. Realising the full value of a business for its owner on exit is his passion.