Understanding No-Disclosure Agreements
Have you ever been asked to keep a secret? Yes? then you already understand the basic idea behind a non-disclosure agreement.
A Non-Disclosure Agreement (NDA), also referred to as a 'Confidentiality Agreement" is a legally enforceable agreement in which a person or business agree on the kind of information, trade secrets, documents or details (generally or specific) that are to be considered confidential and secret with a person that has access to that information or secret. The both parties here agree not to disclose these information, documents or details to others or the general public.
So, an NDA agreement protect business secrets by limiting the way they can be shared or disclosed.
An NDA could be mutual (i.e. both parties disclosing and confidentiality obligation binding on both parties) or one-sided, (i.e. only one party disclosing and confidentiality obligation will be binding on only the recipient of the confidential information).
Trade secrets and confidential information can be any type of information at all that a business wants to keep secret so it can enjoy an economic advantage over its competitors. It may include customer lists, expansion plans, information about new products being developed, information about pending litigation, or data about a company’s clients or customers.
Whether you want to start a business, join a business or enter into an agreement, an NDA is a great way to protect sensitive business information from being disclosed to the public. If you routinely receive confidential information from others, you’ll probably also be asked to sign their NDAs. Just be sure you read them first and understand your obligations.
At Green Quill Solicitors, We advise on a broad range of contractual and commercial related issues. We also have remarkable expertise/skills in law of contract and other related commercial negotiations.
Non-Disclosure Agreements are important for various reasons and have become increasingly popular.
Here are a few instances when they come up:
-Employee non-disclosure agreements.
Buusiness that deals in sensitive information, inventions, research or product development, would definitely want to make sure it's employees don’t divulge company information to outsiders. Even if it's just the ordinary business information such as sales data and customer lists, an employee non-disclosure agreement can help keep secret information out of the hands of competitors.
-Independent contractor agreements.
Independent contractors frequently have access to information that you don’t want made public, a non disclosure agreement will help prevent independent contractors from disclosing information to third parties even after the contract agreement.
-Merger and Joint Venture Agreements
A mutual NDA is useful if two businesses need to work together or establish a merger or Joint Business Venture.
-Agreements with people from whom you are seeking investments/funding.
If you approach investors, you’ll need to divulge information about your products, your finances and your plans. An NDA can help ensure that they don’t share your ideas with a competing startup.
-Agreements with the people with whom you do business.
Lawyers are obligated to keep their clients’ information confidential, but that’s not always the case with most other business people. If the people you do business with receive or have access to your confidential information, you may want them to sign an NDA. Examples include the company you hire to manufacture your new product and the cleaning service whose workers are alone in your office at night.
-Agreements in litigation or arbitration.
When two parties are in a dispute, there is a formal process for exchanging information. Parties routinely require one another to sign confidentiality agreements that prohibit disclosure or use of the information outside of the litigation.