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Drafting Note For Recitals ( A )

Decent Essays

Drafting Note to RECITALS (a) Confidentiality agreements typically do not describe the contemplated transaction in detail to avoid the implication that the parties have come to any agreement on the terms of the transaction. Nonetheless, the definition of “Transaction” should be drafted carefully to prevent potential misuse by the Receiving Party of the Disclosing Party’s information. For instance, the Receiving Party may abandon negotiations and launch a hostile bid for the Disclosing Party using the Disclosing Party’s information in formulating the bid. This form defines “Transaction” as a negotiated transaction, and thus the use by the Receiving Party of the Disclosing Party’s information to launch a hostile bid would be a breach of …show more content…

The definition of “Proprietary Information” in this form provides that information can be considered Proprietary Information regardless of whether it is marked “confidential.” Including such a provision can help the parties avoid an overly burdensome diligence process and any accidental failures to mark information as confidential. Drafting Note to Paragraph 1(a) This provision contains each party’s confidentiality and non-disclosure obligations with respect to the Proprietary Information. It also permits each party to disclose the other party’s Proprietary Information to its Representatives who need to know such information in order to advise such party in doing the deal. Each party will want to ensure that the other party’s Representatives are also bound not to disclose the Proprietary Information. Note that some parties may be uncomfortable with explicitly assuming responsibility for any breach of this agreement by its Representatives. The party may require certain of its Representatives to enter into a joinder or separate confidentiality agreement with the Disclosing Party. Alternatively, each party may

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