Due Diligence Confidentiality Agreement for Canada

Due Diligence Confidentiality Agreement Template for Canada

A comprehensive confidentiality agreement designed for due diligence processes under Canadian law, incorporating federal and provincial privacy requirements. This agreement establishes the framework for protecting sensitive information during corporate investigations, mergers, acquisitions, or investments. It includes specific provisions addressing Canadian privacy legislation (PIPEDA), provincial securities regulations, and competition law requirements, while ensuring compliance with both common law and statutory obligations regarding confidential information and trade secrets.

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What is a Due Diligence Confidentiality Agreement?

The Due Diligence Confidentiality Agreement is essential for protecting sensitive information during corporate investigations and transactions in Canada. It is typically used when one party needs to examine confidential business information of another party for purposes such as mergers, acquisitions, investments, or strategic partnerships. The agreement must comply with Canadian federal and provincial legislation, including PIPEDA, provincial securities laws, and competition regulations. It provides comprehensive protection for confidential information while allowing necessary access for business evaluation, incorporating specific Canadian legal requirements and enforcement mechanisms. This document is particularly crucial given Canada's strict privacy laws and the potential multi-jurisdictional nature of many business transactions.

What sections should be included in a Due Diligence Confidentiality Agreement?

1. Parties: Identification of the disclosing and receiving parties, including full legal names and addresses

2. Background: Context of the due diligence process and purpose of the agreement

3. Definitions: Key terms including 'Confidential Information', 'Representatives', 'Permitted Purpose', and other relevant definitions

4. Scope of Confidential Information: Detailed description of what constitutes confidential information under the agreement

5. Confidentiality Obligations: Core obligations regarding non-disclosure, non-use, and protection of confidential information

6. Permitted Disclosures: Circumstances under which confidential information may be shared with representatives and advisors

7. Security Measures: Required procedures and safeguards for protecting confidential information

8. Term and Survival: Duration of the agreement and which obligations survive termination

9. Return or Destruction of Confidential Information: Requirements for handling confidential information after the due diligence process

10. Remedies: Available remedies in case of breach, including injunctive relief

11. General Provisions: Standard clauses including governing law, jurisdiction, and entire agreement

12. Execution: Signature blocks and execution details

What sections are optional to include in a Due Diligence Confidentiality Agreement?

1. Privacy Law Compliance: Additional provisions when personal information is involved, addressing PIPEDA and provincial privacy law requirements

2. Securities Law Compliance: Special provisions for public companies or when dealing with material non-public information

3. Standstill Provisions: Restrictions on acquiring securities or assets, typically used in M&A contexts

4. Non-Solicitation: Restrictions on soliciting employees or customers, if relevant to the transaction

5. Residual Information: Handling of information retained in memory by representatives

6. Data Protection: Specific provisions for digital information and cybersecurity requirements

7. Competition Law Compliance: Special provisions when parties are competitors or in regulated industries

8. International Transfer: Provisions for cross-border transfer of confidential information

What schedules should be included in a Due Diligence Confidentiality Agreement?

1. Schedule A - Description of Due Diligence Project: Detailed description of the transaction or project necessitating the due diligence

2. Schedule B - Authorized Representatives: List of individuals or roles authorized to receive confidential information

3. Schedule C - Security Protocols: Specific security measures and procedures required for handling confidential information

4. Appendix 1 - Form of Confidentiality Undertaking: Template for additional confidentiality agreements to be signed by representatives

Authors

Alex Denne

Head of Growth (Open Source Law) @ Genie AI | 3 x UCL-Certified in Contract Law & Drafting | 4+ Years Managing 1M+ Legal Documents

Jurisdiction

Canada

Publisher

Genie AI

Cost

Free to use

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