Why you are asked to sign before you see the practice
A dental practice depends on its staff, patients, referral sources and landlord staying calm. If word spreads that the owner is selling, employees may start looking elsewhere and patients may worry, and the practice the buyer is evaluating gets harder to sell. So sellers and their brokers publish listings without the practice's name or address, and release the identity, the financial statements and tour access only to a buyer who has signed a confidentiality agreement, usually called an NDA.
Who you are signing with
The agreement is between you and the listing broker or the seller, and each broker uses its own form. The Dental Practice Market is a neutral index of listings: it does not collect or hold NDAs, and every listing links you straight to the broker, whose process applies. If you are looking at several practices, expect several agreements.
What a typical NDA covers
Most define the confidential information broadly: the practice's identity and location, its financial and patient information, and the fact that it is for sale. They limit your use of that information to evaluating the purchase. They name who else may see it, typically your own attorney, accountant and lender, who are expected to keep it confidential too. They usually forbid contacting the practice's staff, patients, landlord or vendors about the sale without permission, and they require you to return or destroy the materials if you do not proceed. Each has a term, meaning how long the obligations last, and a section on remedies if they are breached.
Clauses worth reading twice
Who may receive the information: confirm your lender, attorney and accountant are covered, so you can actually do your diligence. The term: how long are you bound? Non-solicitation: what you may not do with the practice's staff or patients, and for how long. Non-circumvention: this commonly stops you from going around the broker to deal with the seller directly, so understand what you are agreeing to before you agree. Exclusions: information you already had or that is public should be carved out. Anything unusual, such as a clause that restricts you from looking at other practices, deserves a question to the broker and a read by your attorney.
What signing does not do
Signing an NDA does not commit you to make an offer, to buy, or to pay anything. It is not a letter of intent. You can read the materials and walk away. What continues after you walk away is the confidentiality obligation itself, for the term the agreement states.
Habits that keep you out of trouble
Keep a simple list of what you signed, for which listing, and what the term is, because it is easy to lose track once you are looking at several. Do not forward documents or discuss the practice outside the people the agreement allows. Before you sign, ask the broker what you can know without one, such as the general area, the collections trend and the type of practice, and check the questions in our listing guide. If it is your first one, a short read by your attorney is inexpensive protection.