NDA

The NDA or Non Disclosure Agreement

What is a non disclosure agreement

non disclosure agreementYou’ve been diligent about securing and locking away all your confidential and sensitive documents inside a filing cabinet. You have encrypted all your valuable electronic files and data with passwords. But what about those files and information shared among your employees and potential investors?

Most businessmen want to keep their confidential information private and every business will have information, ideas, proprietary processes etc. that should remain confidential. Yet, in order to conduct business in the real world it is often necessary to disclose valuable information that must remain secret, for a variety of different purposes.

As a responsible business person, it is essential; under these circumstances you have a non disclosure agreement, also known as an NDA or confidentiality agreement in place before proceeding.

Why you need an NDA

A non disclosure agreement, by definition is a legally binding instrument that sets out and governs relationships between you and your potential or existing employees, business associates and investors. Typically this kind of mutual agreement is utilized prior to entering into negotiations or commencement of interviews, and other transactions where confidential or proprietary information is to be disclosed, discussed or exchanged however the use of these agreements is not limited only to these purposes and in fact can have many more uses and variations.

An essential document for keeping all your vital information protected, and should always be in place whenever information is to be shared between parties and absolute confidentiality is necessary for safekeeping of proprietary information.

What sort of terms should it contain

Sometimes a non disclosure agreement will be drafted by a lawyer but more often these days an NDA can be obtained as a stand-alone pre-drafted document or as part of a comprehensive business document package for a fraction of the price of an attorney drafted contract.

A good quality agreement will typically include information and details about the parties involved, what information must remain confidential as well as any other concerns that might be relevant to a specific disclosure like time limits etc. Provisions and clauses within the agreement will vary according to the nature and type of information intended to remain confidential between the parties involved in the disclosure. The document will also contain the remedies in the event that there is a breach by one of the parties to the agreement. The main purpose of this type of agreement though, is to avoid the need for lawsuits. If both of the parties involved follow the agreement, things usually proceed smoothly and accordingly – the non disclosure agreement will serve its beneficial purpose.

Exceptions to a Non Disclosure Agreement

There can actually be exceptions that do not cause breach of contract, in an event of a disclosure from the recipient’s part. This exception occurs if someone not involved in the agreement discloses the confidential information. Clear information regarding this exception must be included in the Non disclosure agreement.

Before sharing information that contains unpublished applications, business strategies, or financial statements, you should ensure that a confidentiality agreement is signed and agreed to by the parties involved. This simple solution will provide the proper legal safeguards on your confidential information and prevent leaks, unauthorized use and outright theft of your valuable data and ideas.

You will find much more information on attorney prepared, pre-drafted non-disclosure agreements and more, for a fraction of the cost of a lawyer, here