Non-disclosure agreement (NDA)

A non-disclosure agreement, or NDA (accord de confidentialité in French), is the contract in which a prospective buyer undertakes to keep the information it receives on an asset confidential and to use it only to assess the transaction. In an off-market sale, no identifying information is shared before it is signed.

In a transaction

A hotel sale NDA usually covers:

• what counts as confidential information, including the very existence of the sale
• permitted use, limited to assessing the transaction
• who may have access, in particular the buyer’s advisers, themselves bound by confidentiality
• a ban on contacting the hotel, its staff, operator, landlord, franchisor, banks or guests
• non-solicitation of staff and, for intermediaries, a non-circumvention clause
• return or destruction of documents if talks end
• how long the undertakings last, since they survive the end of talks

In the hotel sector

A hotel is a visible asset, with staff, guests and partners. A leak can unsettle the team, alert a franchisor or a bank, and weaken trading before any offer has been made. The NDA therefore comes with other measures: an anonymous teaser, a named and watermarked memorandum, and a data room with named, logged access.

Confidentiality must also be reconciled with French rules on informing employees in advance when a business, or a majority stake in certain companies, is sold (the so-called “loi Hamon”). The timing should be organised with a lawyer.

Not to be confused with

The confidentiality clause in a letter of intent or a sale and purchase agreement, which only applies from that stage and does not cover earlier exchanges.

The disclosure rules applied at each stage are set out in our sale process.