Buyer Beware: Website Properties LLC's NDA: What Every Business Buyer Must Know Before Signing
- Evan Howard
- Dec 22, 2025
- 29 min read
We just had an interaction with Website Properties LLC, a Washington State-based internet business broker, when requesting information on a potential business acquisition. After requesting initial information, we recieved their "Prospect and Confidentiality Agreement." While this NDA appears more balanced than some broker agreements we might encounter from other brokers, it still contains several provisions that create unfair risks for buyers and deserves careful scrutiny before you sign.
Here, we call out another Brokerage, examining the specific problems in Website Properties LLC's NDA clause by clause and explains what protections you should demand before agreeing to these terms. Whether you are a first-time buyer evaluating your first business opportunity or an experienced entrepreneur who has purchased multiple companies, understanding these provisions can save you from unexpected liability and costly disputes that could extend long after you have decided not to pursue a business opportunity.
The Website Properties LLC NDA is not a standard agreement designed primarily to protect confidential business information. It is a comprehensive contract that creates extensive financial obligations, restricts your ability to communicate with sellers, and shifts virtually all risk onto you while insulating the broker from responsibility. Before you sign, you need to understand exactly what you are agreeing to and what rights you are surrendering.
The Document:
While it is our opinion that any potential buyer not sign this NDA as written, we went ahead and executed one "as is" for you just to test the responsiveness of the brokerage. Needless to say, we are still waiting on a CIM or any contact from a living, breathing, invidivual about the business of interest.
The Automated System Problem: No Human Response to Buyer Concerns
Before analyzing the agreement itself, prospective business buyers should understand a fundamental problem with Website Properties LLC's process that goes beyond the specific language in their NDA. The system appears to be largely automated with minimal human broker interaction during the initial stages when buyers are making critical decisions about whether to proceed. Website Properties may also be a bit of a business broker co-op.
Prospective buyers report that after expressing interest in viewing information about available businesses and receiving the NDA, attempts to negotiate terms or raise concerns via email go unanswered. This automated approach creates several significant concerns that affect how you should evaluate whether to work with this broker. First, the lack of responsiveness suggests the broker views the NDA as non-negotiable boilerplate rather than a document that should be tailored to protect both parties' legitimate interests and to reflect the actual service the broker provides. Second, the inability to reach a human broker prevents you from having meaningful discussions about problematic provisions before signing, eliminating your opportunity to negotiate from a position of power before you have already committed to the agreement. Third, it raises fundamental questions about whether you will receive adequate broker attention throughout the transaction process if the broker cannot respond to basic questions during the critical initial inquiry phase.
For sellers considering listing with Website Properties LLC, this automated system should raise equal or greater concerns. If the broker is not responsive to serious business buyers during the critical first contact phase when buyers are deciding whether to even look at the opportunity, qualified prospects will simply move on to other brokers and other business opportunities, reducing the seller's chances of a successful sale and limiting the pool of potential acquirers. Sellers want brokers who attract and retain serious buyers, not brokers whose processes cause prospects to lose interest before they even see confidential information about the business.
The One-Sided Representation Disclosure (Paragraph 2) - The Broker Disclaims All Responsibility While Collecting Substantial Commissions
The second paragraph of Website Properties LLC's NDA contains important disclosures about the broker's relationship with the seller and buyer, but the language reveals a problematic approach to broker responsibilities that deserves close examination. The provision states that the broker represents the seller, will be paid a fee by the seller based on any transaction between the seller and buyer, and critically, "under no circumstances does Broker have any responsibility to Prospect as to the accuracy of the information disclosed or any legal duty to Prospect of any kind or nature whatsoever. Broker does not represent Prospect."
While it is entirely appropriate for the broker to disclose that they represent the seller and will be paid by the seller for successfully facilitating a transaction, the sweeping language disclaiming "any responsibility" and "any legal duty. . . of any kind or nature whatsoever" goes far beyond what is reasonable or fair and attempts to eliminate protections that North Carolina and other state laws provide to buyers. Brokers facilitate business transactions by providing information to prospective buyers. Even when representing only the seller, brokers cannot simply disclaim all responsibility for knowingly providing false or misleading information. If a broker knows that financial information is materially inaccurate but provides it to buyers anyway without any verification or investigation, the broker cannot hide behind a blanket disclaimer to avoid liability for fraud or negligent misrepresentation.
Website Properties LLC markets itself as having "over 20 years of experience" and describes itself as a "full service, professional Website Brokerage firm." This representation of professionalism and extensive experience directly contradicts the NDA's claim that the broker has no responsibility whatsoever for the accuracy of information they provide. Professional brokers who claim extensive experience and expertise cannot simultaneously claim they have no responsibility for the accuracy of information they provide to buyers. If the broker truly has no responsibility for information accuracy and no duty to buyers, what professional service are they providing beyond acting as a mail carrier for documents the seller prepares and sending them to interested parties? The claim to be professional experts facilitating transactions conflicts directly with the disclaimer of all responsibility.
This provision attempts to insulate the broker from liability even for information the broker knows or should know is false. While Washington law may not allow brokers to completely disclaim liability for intentional fraud or reckless disregard for accuracy, the language makes it harder for buyers to prove they relied on broker representations if disputes arise. More significantly, this provision reveals the broker's position that you as the buyer are entirely on your own. You receive information from a broker who claims not to verify it, makes no representations about it, and accepts no responsibility for its accuracy. Yet you are expected to pay the broker's commission if you purchase the business.
Buyers should understand that under this agreement, the broker is taking the position that they owe you nothing and have no duty to verify or stand behind any information they provide, even while charging substantial commissions to facilitate the transaction. This is not a balanced relationship. The broker receives compensation for connecting you with sellers and providing information, but accepts no responsibility for whether that information is accurate or useful.
The Hold Harmless Provision (Paragraph 8) - You Indemnify the Broker for Their Own Negligence in Providing Information
Paragraph 8 requires that "Prospect will perform its own due diligence and shall hold Broker harmless from any claims, liability or damage to the Prospect arising out of incorrect or undisclosed information." This deceptively simple language creates one of the most problematic provisions in the entire NDA because it requires you to protect the broker from the consequences of their own negligence and inaccuracy.
A hold harmless provision requires one party to protect another party from liability, claims, or damages. In this case, you agree to hold the broker harmless from any claims, liability, or damage arising from incorrect or undisclosed information about the business you are evaluating. The provision attempts to create a situation where the broker can provide information without verification, without investigation, and without any accountability for whether that information is correct or useful.
This provision creates a remarkably one-sided allocation of risk that heavily favors the broker while placing you in a vulnerable position. The broker provides you with information about a business. That information turns out to be materially incorrect or incomplete. You suffer damages as a result. Yet you must hold the broker harmless from liability for providing that incorrect information, according to the explicit terms of this clause.
Consider a realistic scenario that illustrates the unfairness. The broker provides you with financial statements showing specific revenue and profit figures. You review these statements, rely on those figures to determine an appropriate purchase price and to secure financing from a lender. You negotiate with the seller based on these figures. You close the transaction and take ownership of the business. After closing, you discover the figures were significantly inflated. The actual revenue was substantially lower than represented. The business cannot support the debt service you committed to based on the inflated numbers, and you face significant financial losses. Under this hold harmless provision, you cannot hold the broker responsible even if the broker negligently failed to verify the information or had reason to know it was inaccurate.
The provision applies to "any claims, liability or damage. . . arising out of incorrect or undisclosed information." This language is extremely broad and does not contain important limitations. It does not limit the hold harmless to information the buyer failed to verify or to situations where the buyer was negligent in their own due diligence. It applies to any incorrect or undisclosed information, regardless of the broker's role in creating, verifying, or presenting that information. If the seller intentionally misrepresents financial information, and the broker passes that information to you without any verification or investigation whatsoever, you still must hold the broker harmless under this provision. The broker takes no responsibility for the accuracy of information they provide, even though facilitating information exchange and verifying basic accuracy are ostensibly their primary functions.
Washington courts, like courts in other states, scrutinize hold harmless provisions to ensure they are not unconscionable or against public policy. A provision that requires buyers to indemnify brokers for the brokers' own negligence in providing information may be unenforceable, particularly when there is unequal bargaining power and the provision is buried in a form agreement presented on a take-it-or-leave-it basis. Thirty-nine states have anti-indemnification laws that restrict or prohibit certain types of hold harmless agreements, particularly those that attempt to shift liability for a party's own negligence. While Washington's specific law varies by industry and context, courts generally disfavor provisions that allow parties to completely avoid responsibility for their own wrongdoing.
A balanced NDA would allocate risk appropriately and fairly. The buyer should be responsible for conducting their own due diligence and verifying information before closing. The broker should be responsible for providing information accurately as received from the seller and for not knowingly or recklessly providing false information. Neither party should be able to escape liability for their own intentional wrongdoing or gross negligence.
The 12-Month Tail Provision (Paragraph 11) - Extended Commission Obligations After You Walk Away
Paragraph 11 contains a tail provision stating that the broker is entitled to commission if the business is sold "during the term of the agreement between Seller and Broker and for a period of 12 months thereafter." This provision extends the broker's commission rights well beyond the period of active representation and creates potential liability for buyers who circle back to purchase a business months or years after their initial inquiry.
A tail provision extends a broker's right to receive commission for transactions that close after the broker's listing agreement with the seller expires. The tail protects brokers from sellers who wait for the listing agreement to end and then complete transactions with buyers the broker introduced, thereby avoiding payment of the broker's commission. This serves a legitimate purpose in protecting broker compensation for the work they invested in marketing the business and introducing qualified buyers.
You might wonder why a commission arrangement between the broker and seller should concern you as the buyer. The problem arises from the circumvention provision in paragraph 10, which prohibits you from attempting to "circumvent this agreement in any way at any time". If you evaluate a business through Website Properties LLC, decide not to purchase it based on the information provided, and later learn that the seller's listing agreement with the broker has expired, you still cannot purchase the business without the broker claiming entitlement to commission. The 12-month tail means that even a year after the seller's listing ends, the broker will claim commission rights on any transaction with you.
Tail provisions typically range from 6 months to 24 months, with 12 months being common in the business brokerage industry. From that perspective, Website Properties LLC's 12-month tail is not unusually long compared to industry standards. However, the reasonableness of any tail provision depends heavily on context. A 12-month tail makes legitimate sense when a broker has actively marketed a business, brought multiple qualified buyers to the table, and invested significant time in facilitating negotiations and maintaining relationships. It protects the broker from sellers who deliberately wait out the listing term to avoid paying commission on deals the broker initiated and brought to fruition.
The tail becomes problematic when combined with an automated system that provides minimal broker service. If Website Properties LLC's involvement consists primarily of sending automated emails with business information and marketing materials that the seller provides, with little personalized broker attention, no broker-facilitated negotiations, and minimal ongoing relationship management, a 12-month tail seems excessive for the limited services actually provided. You are agreeing to give the broker commission rights for an entire year even if their only involvement was to send you initial information through an automated system.
The tail provision creates a potential trap for buyers when combined with the circumvention clause and the passage of time. Suppose you sign the NDA, receive basic automated information about a business, and decide within days or a few weeks that it does not fit your criteria. You move on to evaluate other opportunities with other brokers. Eighteen months later, you discover that same business is now listed elsewhere on a marketplace or the seller is marketing independently. You have long since forgotten about Website Properties LLC's NDA that you signed months ago.
You contact the seller and negotiate a purchase price and terms. Website Properties LLC discovers the transaction and demands their commission, arguing you violated the circumvention provision. Even though their listing agreement with the seller ended, and even though the 12-month tail may have expired, they might argue your NDA creates an independent obligation not to circumvent their rights. The NDA language in paragraph 10 supports this interpretation because it states the circumvention prohibition applies "at any time," not just during the tail period. This ambiguity could lead to disputes about commission obligations years after you signed the NDA, requiring expensive litigation to resolve.
The Circumvention and Damages Provision (Paragraph 10) - Undefined Liability for Vague Violations
Paragraph 10 prohibits the buyer from attempting to "circumvent this agreement in any way at any time" and states that violations will result in liability for "any and all damages caused to Broker" plus entitlement to "an expedited restraining order." This provision creates significant risks for buyers because it fails to clearly define what constitutes prohibited conduct and leaves open-ended the damages you could face for alleged violations.
The provision fails to define what constitutes "circumvention" in clear, understandable terms. Does circumvention mean only purchasing the business directly from the seller without paying the broker's commission? Or does it include any contact with the seller, any discussion about the business with third parties, or any action that might reduce the broker's commission opportunity? Without a clear definition, buyers face uncertainty about what conduct violates the agreement. Suppose you evaluate a business through Website Properties LLC and decide not to purchase it. Six months later, you mention to a friend who is also searching for businesses that you looked at a particular online business opportunity but it was not right for you. Your friend becomes interested and contacts the seller independently and purchases the business. Did you "circumvent" the agreement by mentioning the business to someone who later became a buyer? The agreement does not say, leaving you in legal limbo.
The provision states the circumvention prohibition applies "at any time". This language suggests the restriction is perpetual and extending indefinitely beyond the term of the seller's listing agreement and even beyond the 12-month tail period. While the damages provision in paragraph 11 limits the broker's commission entitlement to the listing term plus 12 months, the circumvention language in paragraph 10 is not similarly limited. This creates ambiguity about whether you can ever contact the seller about the business, even years later after all listing and tail periods have expired. Can you contact the seller in year two, year three, or beyond without violating the circumvention clause? The agreement does not clarify.
The provision states the broker "shall be entitled to an expedited restraining order as to any continuing violation". This language attempts to establish that NDA breaches automatically warrant emergency injunctive relief without requiring the broker to meet the normal legal requirements for such relief. Courts issue restraining orders and injunctions when monetary damages are inadequate to remedy the harm and when immediate court intervention is necessary to prevent irreparable injury. Typical situations involving expedited relief include unauthorized disclosure of trade secrets, theft of confidential client lists, or breaches that threaten immediate competitive harm and cannot be adequately remedied by monetary damages.
Website Properties LLC's NDA applies this emergency relief standard to circumvention violations, which typically involve commission disputes rather than confidential information disclosure. Commission disputes are usually resolved through monetary damages rather than injunctions because the harm can be calculated and compensated. The provision's language suggests that merely by signing the NDA, you agree that circumvention causes irreparable harm warranting expedited court orders. This attempts to bypass the normal legal analysis courts conduct to determine whether injunctive relief is actually appropriate and necessary.
Paragraph 11 states that if you breach the agreement or interfere with the broker's right to a fee, you "shall be liable for such fee and any damages, including reasonable costs and attorney's fees". This language creates multiple layers of potential liability that compound on each other. First, you owe the broker's commission. Second, you owe "any damages" caused to the broker, which could include consequential damages, loss of reputation, or other claimed injuries beyond the commission itself. Third, you must pay the broker's attorney fees and costs to pursue the claim against you. The provision does not cap damages or limit them to direct, foreseeable losses. The open-ended language "any damages" creates uncertainty about the full scope of your potential liability. You could face exposure far exceeding the actual commission the broker claims to be entitled to.
The Contact Restriction (Paragraph 9) - Requiring Broker Permission for All Seller Communication
Paragraph 9 requires that the buyer "will not knowingly contact the Seller directly without prior arrangement by Broker and will direct all negotiations, offers of purchase, letters of intent or other communication with the Seller through the Broker." This provision controls your ability to communicate directly with the person considering selling their business and creates a bottleneck that only the broker can control.
This provision serves legitimate functions in protecting seller confidentiality and ensuring orderly transaction processes. Sellers often want to keep sale discussions confidential from employees, customers, and competitors because premature disclosure could disrupt business operations, damage morale, or alert competitors. Allowing unrestricted buyer contact with sellers could compromise that confidentiality and create disruption in the business. Brokers also have a legitimate interest in maintaining their role in negotiations to ensure they receive appropriate credit and compensation for transactions they facilitate. Without contact restrictions, buyers might circumvent the broker after initial introductions and complete transactions directly with sellers.
However, the provision's language is broader than necessary to achieve these legitimate goals. It requires that you direct "all. . . communication with the Seller through the Broker," not just communications related to the potential purchase. This restriction extends to all communication with the seller, period.
Suppose you evaluate a business opportunity through Website Properties LLC, decide not to pursue it, and later encounter the seller at an industry conference or networking event. Can you speak with them about industry trends, potential partnerships, potential advisory relationships, or other business matters unrelated to purchasing their business? The provision's literal language suggests you cannot have any communication with the seller without broker arrangement. This creates an unreasonable restriction on ordinary business networking and discussion.
This restriction becomes particularly problematic if the broker operates primarily through automated systems with limited human responsiveness. If you need to communicate with the seller about time-sensitive matters but cannot reach the broker to arrange contact, the restriction could interfere with legitimate business discussions. And if the broker simply ignores your request for contact arrangement, you face a no-win situation where you cannot comply with the NDA's requirement to have all communication arranged through the broker.
A balanced provision would restrict direct contact specifically related to the potential purchase of the business while allowing other ordinary business communications. The restriction should also have clear time limits, expiring once you notify the broker in writing that you are no longer interested in the business or after a reasonable period (such as 90 days) passes without any active negotiations. After you have decided not to purchase the business and months have passed with no contact from the broker, you should be free to interact normally with the seller.
The Venue and Attorney Fee Provisions (Paragraphs 12 and 13) - Litigation Designed to Favor the Broker and Burden the Buyer
Paragraphs 12 and 13 establish procedural requirements that significantly increase your litigation risk if any dispute arises. Paragraph 12 requires that "venue for any lawsuit shall be in Thurston County, Washington, without regard to any conflict of laws concerns." Paragraph 13 requires that the prevailing party in any dispute recovers their attorney fees and costs. Together, these provisions create a procedural framework designed to maximize the broker's advantage in litigation while burdening buyers with excessive costs and inconvenience.
Paragraph 12's venue requirement requires that all lawsuits must be filed in Thurston County, Washington. Thurston County is located in southwestern Washington State and includes the city of Olympia. If you live in North Carolina, Texas, California, Florida, or anywhere outside Washington State, you must travel to Washington and hire local counsel to defend any claim Website Properties LLC brings against you. This creates significant practical leverage for the broker.
Suppose the broker claims you violated the circumvention provision and owes them commission and damages. Even if you believe the claim is without merit and you have strong legal defenses, defending the lawsuit requires hiring a Washington attorney licensed to practice in Washington courts, traveling to Washington for depositions and hearings, and incurring substantial expenses regardless of the outcome. If you live on the opposite coast, you will need to take time away from your business, pay for travel, and pay for accommodations to defend yourself.
Many buyers facing these costs will settle even questionable claims rather than spend tens of thousands of dollars litigating across the country. The venue provision thus becomes a tool to pressure buyers into settlement rather than a neutral procedural requirement. The broker knows that the inconvenience and cost of traveling to Washington to litigate creates leverage in settlement negotiations. Buyers facing the prospect of expensive litigation far from home often conclude it is cheaper to settle than to fight.
Paragraph 13 requires the losing party to pay the winner's attorney fees and costs. The provision appears mutual on its face, stating "the prevailing party shall be entitled to collect their costs and reasonable attorney's fees". However, the practical effect is heavily one-sided because Website Properties LLC is far more likely to sue buyers than buyers are to sue the broker.
If the broker claims you owe commission or violated the circumvention provision, they can file suit knowing that if they prevail, you must pay their attorney fees in addition to any damages they recover. This creates an additional layer of financial risk for buyers. Not only could you face liability for commission and damages, but you could also be required to pay the broker's legal fees for pursuing the claim against you.
This creates what lawyers call a "chilling effect" on legitimate conduct. If you are uncertain whether contacting the seller or discussing the business with others might violate the vague circumvention provision, you will avoid the conduct rather than risk a lawsuit where you could face attorney fee liability. The attorney fee provision tips the incentive structure heavily in favor of the broker and against buyer autonomy.
The venue and attorney fee provisions work together to maximize the broker's leverage over buyers. If you must defend in Washington State and face attorney fee liability if you lose, even dubious claims become expensive to contest. The broker can use this procedural advantage to pressure settlements that might not be justified on the merits. Buyers who would be willing to litigate disputes if the trial were in their home county might opt to settle rather than travel and pay to litigate across the country.
The Competitor Representation (Paragraph 7) - Potential Waiver of Business Opportunities
Paragraph 7 requires buyers to represent they do not represent competitors and states: "If the Prospect considers itself a competitor of the business for which the prospect is inquiring at any time, Prospect must immediately advise Website Properties via email at the time of inquiry or upon discovery." This provision creates significant uncertainty about what constitutes a "competitor" and creates an ongoing disclosure obligation that could trap unwary buyers.
This provision creates substantial ambiguity about what conduct constitutes being a competitor or representing a competitor. Are you a competitor only if you operate an identical business in the same market? Or are you a competitor if you operate in the same industry, even if your business model or geographic market differs significantly? For buyers evaluating online businesses, the competitor definition becomes especially unclear. If you own an e-commerce business selling products in one category and inquire about an e-commerce business selling products in a different category, are you a competitor because you both use the same sales platform or marketplace? If you operate a website providing information and services and inquire about a website generating revenue from advertising, are you a competitor because you both operate websites?
The provision requires that you "immediately advise" the broker if you consider yourself a competitor "at any time," including "upon discovery." This language creates an ongoing obligation that extends far beyond the initial inquiry. Suppose you inquire about a business in January, and the broker provides information. In March, you launch a new product line or service offering that arguably makes you more competitive with the business you previously evaluated. Must you notify Website Properties LLC of this development? The provision's language suggests you must, but the ambiguity creates uncertainty and risk.
More problematically, the provision does not explain what Website Properties LLC will do with competitor disclosures. If you are a competitor, what are the consequences? Will the broker refuse to provide information about the business? Will the broker notify the seller that a competitor is inquiring? Will the broker use the information to claim you misappropriated confidential information if you later implement business strategies similar to those used by the business you evaluated? The provision provides no explanation of how the broker will use competitor disclosures, creating uncertainty about the consequences of making such disclosures.
This lack of clarity about what happens after you disclose competitor status creates a strategic dilemma for buyers. If you believe you might be a competitor but are unsure, do you disclose and risk the unknown consequences? Or do you remain silent and risk later being accused of misrepresenting your status? There is no good option, and the ambiguity places buyers in an untenable position.
The Entire Agreement and Modification Provisions (Paragraph 15) - Preventing Informal Clarifications
Paragraph 15 states the NDA "contains the entire AGREEMENT of the parties" and requires that "all modifications to this Agreement must be in writing and signed and dated by both parties. Modifications shall not be made by email." This provision attempts to lock you into the form agreement as written and prevents you from obtaining enforceable clarifications or modifications, particularly given the broker's reliance on email communication.
The provision establishes that the NDA is the complete and final expression of the parties' agreement, superseding all prior discussions or understandings. This is standard contract language known as an integration clause and serves legitimate purposes by preventing parties from later claiming side agreements or oral understandings modified the written contract.
However, the provision creates significant practical problems when combined with Website Properties LLC's automated system and documented lack of broker responsiveness. If you have questions about the NDA's meaning, request clarifications about specific provisions, or attempt to negotiate modifications, and the broker does not respond or responds only through automated messages, you have no way to document understandings or obtain agreed modifications. You cannot obtain clarifications that would help you understand what you are signing.
The provision explicitly states that modifications cannot be made by email. Given that Website Properties LLC's system operates primarily through email communication, this creates a practical impossibility. If you email objections to specific provisions or request modifications, and the broker emails back appearing to agree to certain changes, that email exchange does not constitute a valid modification under paragraph 15. The modification must be "in writing and signed and dated by both parties," which implies a formal written document separate from email correspondence. The broker can claim any email exchanges do not constitute valid modifications because they were not signed formal documents.
This provision protects the broker from buyers who might later claim that informal email exchanges modified the agreement's terms or created understandings that changed how the NDA applies. That is a legitimate protective function. But it also prevents buyers from obtaining enforceable clarifications or modifications through the primary communication channel the broker uses. The result is that buyers cannot obtain the confirmation in writing of any alleged agreements or understandings about how the NDA will be applied to their specific situation.
The Confidential Information Obligations (Paragraphs 4, 5, 6, and 7) - Reasonable Restrictions With Concerning Scope Issues
Paragraphs 4 through 7 define confidential information, establish the buyer's obligations to protect it, and set requirements for returning or destroying information when interest in the business ends. Unlike many of the other provisions analyzed in this article, the confidentiality obligations themselves are generally reasonable and appropriate in scope compared to the Dynasty NDA and similar agreements.
Sellers have legitimate interests in protecting financial information, customer lists, operational details, and the fact that they are considering selling their business. The NDA appropriately requires that buyers keep information confidential, use it only for evaluating the potential purchase, and limit disclosure to advisors who need access for evaluation purposes. These obligations protect sellers without unduly burdening buyers. The confidentiality provisions allow disclosure only to your "agents, or officers, directors, members and/or managers of its business entity, potential debt financing sources or financial and legal counsel" and only "with those having a specific need to know, each of whom shall be subject to written obligations of confidentiality no less restrictive than the terms hereof".
However, paragraph 4 includes "the Sellers intent to sell their business" within the definition of confidential information. This provision requires buyers to keep confidential not just specific business details, but the mere fact that the seller is considering a sale. This creates practical complications for online business acquisitions. If you evaluate an e-commerce business and later see that same business listed on a public marketplace or advertised through other channels, can you mention to industry contacts that you know the business is for sale? The provision's language suggests you cannot, because the seller's intent to sell is confidential information. This becomes particularly problematic if you want to discuss the opportunity with potential partners or co-investors. You must keep confidential even the fact that the business is available, making it difficult to have preliminary discussions with others who might join you in the acquisition. For consortium purchases or acquisitions by entities with multiple owners, this restriction can be impractical.
Paragraph 6 requires that if you discontinue interest in the business, you must "return or destroy all Confidential Information received in written or tangible form, including copies, or reproductions or other media containing such Confidential Information, within ten (10) business days." This obligation is standard in NDAs and serves legitimate purposes. However, the provision also states you "may retain one (1) copy of any Confidential Information only for the purpose of demonstrating compliance with this Agreement, and/or compliance with legal or regulatory requirements." The retention exception makes practical sense, but it creates ambiguity about what constitutes "demonstrating compliance" with the agreement. If the broker later claims you violated confidentiality obligations, you will need the original information to defend against those claims and show that what you disclosed was not actually confidential or came from other sources. The single-copy retention right should clearly permit retention for these defense purposes, but the language does not explicitly state this.
What You Should Do If Presented With This NDA
If Website Properties LLC presents you with this NDA before allowing you to view information about online business opportunities, you should take the following steps to protect yourself and to evaluate whether this broker is worth working with.
Request Modifications in Writing
Do not sign the agreement as written. Prepare a written list of requested modifications addressing the most problematic provisions. Send this list via email to Website Properties LLC and request a written response. Document everything. Specifically, request the following modifications:
Revise the representation and hold harmless provisions to clarify that while you will conduct your own due diligence, the broker remains responsible for not knowingly providing false or misleading information. A balanced provision would state that the broker will provide information accurately as received from the seller and will not knowingly or recklessly disclose information known to be false.
Narrow the circumvention provision to define clearly and specifically what conduct constitutes circumvention and limit the prohibition to a specific timeframe tied to the listing and tail periods. Do not agree to "any time" restrictions. The prohibition should expire when the listing period and 12-month tail period end.
Remove the perpetual restriction implied by "at any time" language in the circumvention clause. Once the listing agreement and tail period expire, you should be free to contact the seller and discuss potential transactions without broker involvement. After 12 months, the broker's legitimate interest in protecting commission has been satisfied.
Clarify the competitor definition and explain how Website Properties LLC will use competitor disclosures. Will the broker refuse services if you are a competitor? Will they notify the seller? Request that the broker provide a written definition of what constitutes a competitor in the context of online business acquisitions.
Modify the venue provision to allow proceedings in the jurisdiction where you reside or where the business is located. At minimum, add language allowing you to challenge venue if Thurston County would be unreasonably inconvenient given the circumstances. Standard contract language permits venue challenges when enforcement would be unreasonably burdensome.
Remove the expedited restraining order language and clarify that injunctive relief is available only when the broker meets standard legal requirements for such relief and demonstrates irreparable harm that cannot be remedied by monetary damages.
Allow email modifications given that Website Properties LLC operates primarily through email communication. Modify paragraph 15 to state that email exchanges between the broker and buyer documenting agreed changes constitute valid modifications if both parties sign their email messages. This is consistent with modern contracting practices.
Document Non-Responsiveness
If Website Properties LLC does not respond to your modification requests or responds only with automated messages, document this non-responsiveness carefully. Keep copies of all emails you send and any automated responses you receive. Print and save these communications.
This documentation serves two important purposes. First, it establishes that you attempted to negotiate fair terms and the broker refused to engage in meaningful negotiation or even respond to legitimate concerns. Second, it may support later arguments that the agreement is a contract of adhesion presented on a take-it-or-leave-it basis, which courts scrutinize more carefully for unconscionable terms and unreasonable provisions.
Evaluate the Broker's Service Level
The broker's responsiveness (or lack thereof) during the NDA phase tells you a great deal about the service level you can expect throughout the transaction process. If Website Properties LLC cannot or will not respond to reasonable questions about the NDA during the inquiry phase, how will they facilitate communication and coordination during due diligence? How will they handle issues and disputes that arise during negotiations? How will they coordinate the closing process and ensure all necessary documents are prepared and executed?
Professional brokers who provide meaningful value throughout the transaction process should be responsive during the initial inquiry phase when you are deciding whether to even look at available businesses. An automated system that ignores buyer questions suggests the broker's involvement will be minimal beyond sending automated emails with business information. You deserve a broker who is accessible, responsive, and invested in facilitating a successful transaction, not one who operates only through automated systems.
Consider Alternative Options
There are many business brokers and marketplaces specializing in online business sales. Some use more balanced NDAs that protect sellers' confidential information without creating unreasonable liability for buyers. Some brokers provide actual personalized service rather than operating through automated systems.
If Website Properties LLC insists on its form agreement without modifications and operates through an automated system with minimal human interaction, consider whether you want to work with that broker. The businesses listed with Website Properties LLC may be available through other brokers or marketplaces with more reasonable terms and better broker service.
Consult an Attorney
Have an attorney experienced in business transactions review the NDA before you sign it. This is especially important if you live outside Washington State, because the NDA requires that disputes be litigated in Washington under Washington law. An out-of-state attorney cannot represent you in Washington court, so you may need to hire local counsel if disputes arise.
An attorney can identify additional concerns specific to your situation, negotiate modifications on your behalf, and help you understand the full scope of obligations you are accepting. The cost of an hour or two of attorney time reviewing an NDA is minimal compared to the potential liability you could face under these provisions. Given the venue and attorney fee provisions, having a lawyer review this NDA is a wise investment.
For Sellers: Why This Matters to You Too
If you are considering listing your online business with Website Properties LLC, the NDA's problems and the broker's practices should concern you as well as potential buyers.
Professional, sophisticated buyers will review the NDA carefully before signing. When they identify problematic provisions and cannot get responses to modification requests, many will simply move on to other opportunities. This is particularly true for experienced buyers who have purchased businesses before and understand what reasonable NDA terms look like.
This means your business may not reach the most qualified buyer pool if the broker's NDA and automated system deter serious prospects during the initial inquiry phase. You want a broker who attracts and retains qualified buyers, not one whose processes cause prospects to lose interest before even seeing your business information. If your online business is unique or has valuable strategic synergies with potential acquirers, those sophisticated acquirers will walk away if they perceive the broker is difficult to work with and the terms are unreasonable.
The automated system and non-responsiveness that buyers experience raises fundamental questions about the broker's service level throughout the transaction. If the broker cannot respond to buyer inquiries during the listing phase, how effectively will they market your business to qualified acquirers? How thoroughly will they screen potential buyers to ensure you are not wasting time talking to prospects who are not serious or qualified? How effectively will they facilitate negotiations and help you obtain the best possible terms and price? How smoothly will they coordinate the closing process?
You are paying commission for professional broker services, not for automated email distribution. The broker's practices during the buyer inquiry phase provide insight into whether you will receive meaningful value for the commission you are paying. A responsive, engaged broker who works to address buyer concerns and facilitate serious transactions provides value worth paying for. An automated system that ignores buyer questions and refuses to engage on reasonable terms does not.
Understanding Your Rights and Protections
Even if you have already signed Website Properties LLC's NDA, you are not without recourse if disputes arise. North Carolina contract law and Washington law both provide protections against unconscionable or unreasonable contract terms, and you should understand your potential defenses.
Washington courts, like courts in North Carolina and other states, will not enforce contract provisions that are unconscionable, against public policy, or obtained through fraud or unequal bargaining power. Hold harmless provisions that attempt to insulate parties from liability for their own negligence or intentional wrongdoing may be unenforceable, particularly when there is unequal bargaining power and the provision is presented as a non-negotiable form term.
Vague contractual provisions are interpreted against the party who drafted them. If the circumvention language is ambiguous about what conduct is prohibited or over what timeframe the prohibition applies, courts will construe that ambiguity in your favor as the non-drafting party. A provision stating the circumvention prohibition applies "at any time" with no endpoint is arguably unreasonably vague.
Restrictive covenants that exceed what is necessary to protect legitimate business interests can be found unenforceable or reformed by courts. If Website Properties LLC attempts to enforce a circumvention restriction far beyond the listing and tail periods, you have arguments that the provision is an unreasonable restraint on trade.
However, asserting these defenses requires litigation, which is expensive and time-consuming, particularly when you must litigate in Washington State if you live elsewhere. The venue provision ensures that any litigation will be costly and inconvenient. The attorney fee provision means that if you lose, you must pay the broker's attorney fees in addition to any damages. It is far better to negotiate fair terms upfront or decline to sign than to rely on challenging unfair terms later.
Conclusion: Proceed With Caution and Demand Fair Terms
Website Properties LLC's Prospect and Confidentiality Agreement is not the most egregious broker NDA in the industry, but it still contains several provisions that create unfair risks for buyers while providing extensive protections for the broker. The agreement is significantly more reasonable than some broker NDAs (such as Dynasty Business Advisors'), but it still falls short of being fair and balanced.
The one-sided hold harmless provision that requires you to indemnify the broker for providing inaccurate information, the vague circumvention language that could be interpreted to restrict your actions indefinitely, the mandatory Washington venue that forces you to litigate far from home, the expedited restraining order provision that presumes circumvention causes irreparable harm, the automated system with minimal broker responsiveness, and the lack of meaningful broker service all combine to create an agreement that heavily favors the broker while providing little protection or service value to buyers.
Before signing this or any broker NDA, read it carefully, identify problematic provisions, and request modifications in writing. Document the broker's response (or lack thereof). If the broker refuses to negotiate reasonable terms or does not respond to your concerns, consider that a significant warning sign about how they will treat you throughout the transaction process. You deserve a broker who is accessible, responsive, and committed to protecting your interests while fairly representing the seller.
Buying a business is a significant financial decision that deserves careful attention to every agreement you sign. Do not let eagerness to view available listings pressure you into accepting unfair terms that could create liability lasting months or years after you have walked away from a potential deal.
Demand fair terms before you sign, or be prepared to walk away and find a broker who will treat you as a valued client rather than as a source of liability risk to be managed through aggressive contract provisions. There are better brokers out there who use more balanced agreements and provide better service. Find them before signing anything that could create long-term obligations and unexpected liabilities.
Our Solution
For our client in this specific instance, and business, they have proceeded to execute the "NDA" as written and if the business is of interest after intial review, we will be drafting our letter of intent to include specific clauses requiring the seller to indemnify our buyer for these specific "NDA" clauses. And yes, we will be detailing out each individual clause and the reason for the indenficiation. It will place the broker in an ackward situation having to explain their "NDA" practices to their client, but we cannot allow our client to be taken advantage of or accept the potential risk described above.
Important Legal Disclaimer: This article is for general educational purposes only and is not legal advice. It reflects perspectives from experienced North Carolina business attorneys and M&A advisors at Howard Law regarding documented cases of business broker misconduct and regulatory failures. This is not legal advice for any specific jurisdiction. Reading or relying on this article does not create an attorney-client relationship with Howard Law. Case information is based on publicly available court records and regulatory filings.
Howard law is a legal and M&A advisory firm providing experienced representation for buyers and sellers navigating business transactions nationwide. We specialize in protecting client interests from unqualified or unethical intermediaries while ensuring successful deal completion with appropriate professional standards. Contact us at www.ehowardlaw.com for consultation on your business acquisition needs.
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