How Can You Protect Your Business During Preliminary Negotiations?
When it comes to business deals, preliminary negotiations and introductions often take place before the deal ever closes. This may lead to a bit of anxiety or internal struggles about how much to reveal in order to pitch your business opportunity or sell our idea, without giving away too much information. The parties will almost always have to give up some information before any type of agreement is reached and in order to assess the viability and attractiveness of the deal. This is true whether you are talking about commercial or business transactions, and almost any other type of transaction.
The whole concept is similar to dating. You go on a date to get to know someone better. You want to learn things about the other person and share information about yourself with them. However, if things don’t work out, you can’t “unlearn” things about that other person. It is the same with business deals. Once you reveal information to each other about your business you can’t unsee or unhear things that were shared during the preliminary negotiations just because the deal didn’t work out.
What Are Options to Protect Yourself During Business Negotiations?
So if you can’t unsee or unlearn information, how do you go about protecting private business information that is revealed? There are a few clauses or agreements that are often used including non-disclosure agreements/confidentiality agreements, non-circumvention agreements, or a hybrid of the two.
- Non-disclosure/Confidentiality Agreements – These agreements are the same but are known by different names. They are sometimes also referred to as proprietary information agreements, confidential disclosure agreements, or secrecy agreements. Regardless of what they are called, the purpose is to restrict the party’s ability to reveal any confidential, sensitive, or proprietary information that could be shared over the course of the negotiations.
- Non-circumvention Agreements – These agreements are used to protect ideas, relationships, and opportunities that may be part of the business deal. This simply means that neither party will inappropriately bypass the other party or use information from the other party for the purpose of pursuing advantages that may be unrelated to business. This may include clients, vendors, personnel, and more. Each party agrees in this type of agreement to only use the information obtained to pursue the business relationship between the two parties.
- Hybrid Agreement – These agreements are a hybrid between the above two agreements and are used in the early steps of a business agreement. They combine the purposes of both agreements into one document and aim to do two things. First, they prevent one party from bypassing another party to achieve any business advantages beyond the agreement that is taking place. Second, they prevent the disclosure of any propriety, confidential, or sensitive information that may be shared during the discussions.
Contact a Florida Business Planning Attorney Today
If you are planning negotiations with another company and you aren’t sure how to protect your information, you need to consult with an experienced Florida business attorney today. Tampa attorney David Toback has years of experience dedicated to business planning and can help you ensure that your information is protected during negotiations. Contact his office today to schedule a consultation.