Dra fting
Co nfide ntia lity
Co ntra cts Fo r
Re a l Esta te
Tra nsa ctio ns
(With Sa mple Cla use s)
Gregory G. Gosfield
If information is power, as the pundits say, then safeguarding
information safeguards power. A comprehensive confidentiality
contract should allow information to be shared without empowering
adversaries or enfeebling the information giver.
Gre g ory G. Gosfie ld is a par t n e r in t h e f in an ce an d r e al
e s t at e gr oup in t h e
Ph il ade l ph ia of f ice of De ch e r t LLP . He is l is t e d in The Best Lawyers in America an d publ is h e s
an d l e ct ur e s f r e que n t l y.
A CON FIDEN TIALITY CON TRACT IS
FREQUEN TLY r e qu ir e d
a s
a
pr e con d it ion t o t h e
in ve s t iga t ion
o f
a
pr o s pe c t ive
r e a l
e s t a t e
oppo r t un it y. In t h e t ypica l t r an s ac t ion , t h e con f ide n t ia l it y con t r ac t is
s ign e d a f t e r t h e b r oke r con t r ac t an d be f o r e t h e l e t t e r o f in t e n t . It
is on e o f t h e b r ac in g r e l a t ion s h ips t h a t b in d t h e own e r an d t h e
pr os pe c t
be f o r e t h e t r an s ac t ion a l
con t r ac t . As a r e s u l t , it
can
augme n t o r ups e t o t h e r ope r a t ive docume n t s , s uch a s t h e acce s s
ag r e e me n t , l e t t e r o f in t e n t , an d t r an s ac t ion con t r ac t , by a t t e mpt in g
t o cove r t h e s ame g r oun d .
As t h e l u s t y in t e r cou r s e be t we e n r e a l e s t a t e mar ke t s an d capit a l
mar ke t s
in c r e as e s ,
s o
doe s
t h e
pr e va l e n ce
o f
con f ide n t ia l it y
con t r ac t s
in
r e a l
e s t a t e
t r an s ac t ion s . Some t ime s t h e
t e r ms o f
con f ide n t ia l it y
a r e
h u r r ie d l y
acce pt e d
wit h ou t
much
t h ough t .
Some t ime s t h e y con t a in pr ovis ion s t h a t a r e n o t me an in g f u l t o t h e r e a l
e s t a t e t r an s ac t ion .
Th is a r t ic l e wil