How to Deal with a Breach in Business Confidentiality

Throughout the M&A process, buyers and sellers sign confidentiality and non-disclosure agreements. If employees or competitors find out about a potential sale ahead of time, it can cause mayhem and possibly disrupt the M&A process. Despite the confidentiality agreement, it is possible that someone may slip up or tell the wrong person and breach the contract. If a breach in business confidentiality occurs, the following are a few tips to arm you with the knowledge to resolve this issue.


Address Immediately

The break in a business confidentiality agreement must be addressed immediately. Pick up the phone and contact the person who caused the breach. Using the telephone rather than email will help you to assure the person that you are not angry (as emotion can often be misconstrued in email) but that you are intent on a business confidentiality breach never occurring again. Chances are that they will apologize as soon as they are aware of the problem. If you allow them this chance before going off on a rant, the situation can probably be mended. Accessing someone by phone is also often a quicker method, which is important to utilize in an emergency situation such as this.


Think About the Consequences

How much will this business confidentiality breach affect the rest of your M&A process? If the breach can easily be remedied, then accept the apology and move on as long as the person responsible assures you that it will not happen again. Chances are that the breach will not be toxic and you can move forward without taking legal action. To sue would consume a lot of time and money. Speak with your lawyer if you are unsure of how to move forward.


If you are thinking of selling or buying a business, contact George & Company. With nearly 40 years of experience, our team of brokers can assist with any aspect of the M&A process