The agreement on the confidential treatment of all information which is made available to the potential buyer prior to the purchase and sale of the company is also an adequate means in German practice and under German law in order to avoid third parties from obtaining knowledge on internal matters of the company to be sold.
The confidentiality agreement includes a whole range of rulings which are all valid under German law. When signing such a confidentiality agreement, the only matter for the potential buyer in the final count in whether he/it is prepared to commit himself/itself to confidentiality and secrecy in this way.
The present declaration is a genuine declaration under German law, i.e. judicial claims may well arise for the potential seller from this agreement, especially compensation claims. Over and above the present ruling, another ruling is frequently included in such agreements in Germany concerning a contract penalty independently of a compensation claim. The potential buyer normally agrees with such a supplementary agreement on a contract penalty to the effect that he/it will pay a certain amount to the potential seller in the event of information becoming known about the company to be sold which could only have been transmitted by the potential buyer or which could only have originated from the environment of the potential buyer.
Reference is again made to the possibility of obtaining a judicial reduction of the agreed contract penalty, as mentioned above.
For further information please contact Dr Erich Michel, Wessing Berenberg-Gossler Zimmermann Lange, Freiherr-Vom-Stein-Strasse 24-26, Frankfurt am Maim 60323, Frankfurt, Germany- Tel: +496 997 1300, Fax: +496 997 130100.
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