NDA Checklist: What to Check Before Signing a Confidentiality Agreement When Buying a Business in Australia

The Complete NDA Review Checklist for Australian Business Buyers

Work through this checklist before signing any confidentiality agreement in a business acquisition. It takes under ten minutes. Most of these items are fine as-is — the goal is to flag anything that isn't.

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Section 1: Parties and scope

• Both parties are correctly named. Your legal entity (company or trust, if applicable) not just your personal name. If you're buying through a company that doesn't exist yet, clarify with your solicitor before signing.
• The business is identified. The NDA should reference the specific business or transaction, not be open-ended in a way that could capture your general commercial knowledge.
• The seller's entity is the right entity. Confirm the signing entity matches the entity that actually owns the business — this matters if there are multiple related companies.

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Section 2: Definition of confidential information

• The definition is reasonable. It should cover business financials, customer lists, operational information, and similar. It should not extend to general industry knowledge or information already in the public domain.
• A "publicly available" carve-out exists. You shouldn't be bound by confidentiality over information that's already publicly known. Most standard NDAs include this; check that it's there.
• The "already known to you" carve-out exists. If you already knew something before signing the NDA — say, you worked in the same industry — you shouldn't be bound on that pre-existing knowledge.
• The definition doesn't extend to the existence of the transaction. Some NDAs make the fact that discussions are happening confidential. This is acceptable but worth being aware of — it means you can't tell your accountant you're looking at a business without potentially breaching the agreement (unless the permitted disclosures clause covers this).

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Section 3: Permitted disclosures

• Your advisors are covered. The NDA should explicitly permit disclosure to your solicitor, accountant, financier (bank or broker), and any other professional advisor involved in evaluating the deal. Check the language — some NDAs say "employees" only, which doesn't include external advisors.
• The "need to know" limitation is present. Permitted disclosures should be limited to people who genuinely need the information, not your entire professional network.
• You are responsible for your advisors' compliance. This is standard — you agree to ensure that anyone you share information with is also bound. Acceptable as long as the permitted disclosures list is complete.
• Disclosure required by law is permitted. If a regulator, court, or the ATO compels disclosure, you need to be able to comply. This carve-out should be present.

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Section 4: Non-solicitation clauses

• The non-solicitation clause is present (and understood). Most business sale NDAs restrict you from approaching the seller's employees, customers, or suppliers independently while negotiations are ongoing. This is standard and reasonable.
• The scope is limited to the negotiation period (or a defined period thereafter). A non-solicitation that runs for two years after negotiations end — covering all the seller's customers and staff — is significantly broader than standard. Push back if the term extends more than twelve months post-termination.
• "Approach" is defined, not left open. Some non-solicitation clauses are so broad that receiving an unsolicited call from a seller's employee could put you in breach. If the language is ambiguous, ask for clarification in writing before signing.
• Your existing relationships are excluded. If you already have relationships with people who happen to work at or buy from this business, the NDA should not restrict those pre-existing relationships.

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Section 5: Return and destruction of information

• There is a clause requiring return or destruction of confidential information if the deal doesn't proceed. This protects the seller, but also clarifies your obligations — you're not sitting on their financial data indefinitely if you walk away.
• The clause is reasonable in scope. Requiring deletion of digital copies from your devices and email is reasonable. Requiring destruction of notes taken during negotiations is overreach — your solicitor's file is protected by legal professional privilege and standard practice.
• The timeframe is specified. "Promptly upon request" or "within 14 days of termination of negotiations" is standard. Open-ended destruction obligations are unusual.

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Section 6: Term and termination

• The confidentiality obligation has a defined term. One to two years from the date of the agreement is standard. Anything beyond three years warrants a question; "in perpetuity" is unusual and worth pushing back on.
• The term is separate from the non-solicitation period. These are often different lengths, and they should be.
• What terminates the agreement is clear. Does it terminate automatically when negotiations end? After a fixed period? Only if one party gives notice? Know what you're agreeing to.

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Section 7: Remedies and dispute resolution

• The remedies clause is proportionate. Most NDAs include a clause allowing the non-breaching party to seek injunctive relief (i.e., a court order stopping the breach) without needing to prove financial loss. This is standard and acceptable.
• No liquidated damages clause. Some NDAs include a pre-agreed damages amount for breach — a fixed financial penalty. This is unusual in business sale NDAs and worth flagging to your solicitor if it appears.
• Governing law is specified. It should be the state or territory where the business operates, or where you're based. A governing law clause nominating another jurisdiction (particularly overseas) is unusual and worth querying.

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Section 8: Anything unusual

• No exclusivity clause buried in the NDA. This does happen. A clause that prevents you from looking at competing opportunities while you're evaluating this business is not standard in an NDA — it belongs in a heads of agreement or letter of intent, and only after you've committed to a process. If it appears in the NDA, flag it.
• No standstill provisions. Some seller-side advisors include clauses preventing you from acquiring any competing business for a defined period. Not standard at the NDA stage.
• No fee or cost obligations. The NDA stage should involve no payment commitments. If there's a clause requiring you to cover costs in any scenario, take legal advice.

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Before you sign: quick checklist

• I have read the entire document (not just skimmed it)
• My legal entity is correctly named as the signing party
• My advisors are covered under permitted disclosures
• The term is reasonable (under 3 years for confidentiality, under 12 months for non-solicitation post-termination)
• There are no exclusivity, standstill, or payment obligations buried in the document
• If anything was unclear, I asked the broker or seller's solicitor for clarification in writing before signing

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What to do if something looks wrong: In most cases, a simple email to the broker — "Can you clarify the intent of the non-solicitation clause in clause 4.2?" — resolves it quickly. Reputable sellers and brokers won't be offended by a buyer who reads what they sign. If a request for clarification is met with resistance or pressure to sign immediately, that's worth noting.

Once you're past the NDA and into the information memorandum, the full due diligence checklist is the next resource you'll need. And if you're still deciding whether to pursue a business you've just signed an NDA on, the initial deal screening checklist covers how to make that call in thirty minutes.

This is Module 3 of the Playbook — the deal sourcing and initial evaluation phase. The checklist above doesn't replace legal advice; if a clause looks genuinely unusual or the deal is material, spend the hour with your solicitor before you sign.