A buyer eager to see real financials tends to sign whatever confidentiality agreement is put in front of them. Most of an Ontario business-sale NDA is standard and fine to sign as drafted — a small number of terms are worth pushing back on before signing, not after.
Key takeaways
Most of the terms in a standard Ontario business-sale NDA exist to do exactly what the name says — protect a seller’s confidential information while a buyer looks at real numbers before committing to anything. A buyer should expect to sign most of it as drafted. A small number of terms are worth reading carefully and pushing back on before signing, because they are the ones a buyer has genuinely less leverage to fix once real information has already changed hands.
Worth noting directly: a commonly cited source for this exact question is a treadstonelaw page about a seller holding a firm asking price and declining to negotiate — useful for a different question entirely, and not about NDA terms at all. (treadstonelaw.ca, on refusing to negotiate price) The actual Ontario legal material on NDA mechanics for a business sale lives on a different pair of pages, cited below.
The single clause worth reading most carefully is the definition itself. “A clear definition of ‘confidential information’ — vague definitions create disputes later about what was actually protected” is the standing guidance on this point. (treadstonelaw.ca, confidentiality clause vs standalone NDA) A buyer should refuse, or narrow, a definition broad enough that it could later be read to cover information the buyer already knew independently, information that is genuinely public, or information the buyer develops on its own after the deal falls through — all standard carve-outs a well-drafted NDA should already include, and worth asking for specifically if they are missing.
A standstill or exclusivity commitment asked of a buyer is common and often reasonable on its own. The standing Ontario guidance on this specific point is to “make it mutual when the buyer is paying in shares, is sharing its own financial statements, or is asking for a standstill.” (treadstonelaw.ca, NDA for a business sale) A buyer disclosing its own financials as part of the process, or offering part of the price in shares of its own company, should expect — and can reasonably ask for — the same confidentiality protection running in the other direction, rather than a one-sided agreement that protects only the seller’s information.
Many NDAs in this hub bundle in a non-solicit of the target’s employees or customers — a buyer agrees not to approach them directly while the deal is under discussion. Worth being precise about what does and does not limit this clause: Ontario’s October 25, 2021 ban on employment non-competes does not touch it. The Act’s own guidance is explicit that non-solicit and non-disclosure agreements are “not prohibited” by the ban, which applies specifically to non-compete agreements. (Ontario, ESA non-compete guide) That means a buyer should not expect a badly scoped non-solicit to be narrowed by statute the way an employment non-compete increasingly is — there is no equivalent backstop here. The negotiation over duration and scope at signing is the only real limit on this clause, which is exactly why it deserves the same attention a non-compete would get, even though it is legally a different thing.
Duration is one of the variables the same confidentiality-clause guidance flags as changing by deal type, rather than fixed at one standard length. (treadstonelaw.ca, confidentiality clause vs standalone NDA) What is worth refusing on principle, regardless of the specific number agreed, is no stated term at all. An obligation that runs forever with no expiry date is unusual, is rarely necessary to protect information that will itself become stale, and is one of the easier terms to fix before signing simply by asking for a defined number of years rather than accepting silence on the point.
A seller’s NDA draft defines “confidential information” as “any information disclosed by either party,” with no carve-out for public information, includes a two-year non-solicit of employees and customers, a one-way standstill even though the buyer’s own offer includes a rollover equity component, and no stated term for the confidentiality obligation itself. A buyer pushes back on four points, not the whole document: narrow the definition to add the standard public-information and independently-known carve-outs; keep the two-year non-solicit as drafted, since two years is a reasonable, common figure and the clause is not touched by the ESA ban regardless; make the standstill mutual given the rollover component; and add a five-year term to the confidentiality obligation. Three of the four are accepted without much discussion — the definition dispute is the one worth spending real negotiating time on, because it is the term most likely to cause a real disagreement later.
Related: what a letter of intent should and should not fix, the glossary entry on non-disclosure agreement, and the case file on a data-room leak that reached a competitor.
Rarely, and it is worth being cautious about one appearing this early. A non-compete restricting the buyer’s own future activity, signed before any deal terms exist, is an unusual ask at the NDA stage — that kind of restriction more typically belongs in the purchase agreement itself, tied to an actual closed transaction, not a preliminary confidentiality document.
The ban addresses non-compete agreements between an employer and an employee — it is not written for an arm’s-length buyer signing a confidentiality or non-solicit agreement as part of a business purchase. A buyer should not assume the ESA ban applies here at all, whether signing personally or through a corporation, which is exactly why the negotiated terms of the NDA itself carry the real weight.
A short call is enough to flag which clauses in a draft NDA are standard and which are worth pushing back on.
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