Keeping secrets is a complicated business. Alike interpersonal relationships, business relationships can also fall apart when the trusted party fails to keep their mouth locked. But everything becomes more serious when there’s a contract, right? A non-disclosure agreement or NDA is exactly for that purposes. It legally obliges to keep any specified information top-secret. It’s a fairly common thing in the business world. Businesses can use the NDA to protect any confidentiality such as client information, marketing plans, manufacturing peculiarities, etc. Unlike everyday secrets, non-disclosure allows you to sue for the damage.
A More Detailed Definition
Two parties bound by a secret and a paper to keep things in control, that’s clear. Now let’s learn more about what types of secrets those can be. The most basic example is for the NDA to secure sensitive information. The agreement guarantees the promise not to share the information with other parties. And if that happens, the victim can insist on breach of contract.
Businesses can use the contract while working on a new concept or a product. Doing so will help to secure the patent right. No need to mention how crucial patents are for businesses. Stealing originality nowadays is more common than ever. If your invention is disclosed publicly that can negatively affect your patent rights.
Non-disclosure agreements are also for putting things straights and avoiding confusions. Meaning, the agreement becomes a document which classifies what is exclusive and what is confidential information.
Those are the most common examples, however, a non-disclosure agreement can be also used to secure customer lists, passwords, and any other data.
When secrets are at stake, you know that there will be a plenty of details to get into. Namely, the agreement should include the following:
- Definitions and exclusions of confidential information
- Obligation for all parties involved
- Time periods
The first one specifies the types of information that the agreement secures. In fact, this part refers to the rules and subject of the agreement, without actually revealing the exact information. While you might think that the NDA includes information that’s supposed to be confidential, but it also can exclude information that is considered common knowledge.
NDAs are straightforward when it comes to defining what the recipient of the information can and cannot do. You don’t have the right to breach an agreement or make others do so.
Time periods also play an important part. Usually obliging the recipient to keep silent for a number of years. But this is a point which you can negotiate.
When Is the NDA Most Useful?
It’s 21st century and it’s needless to say how fast information can be leaked and spread. Therefore, non-disclosure agreements turn out to be super handy. It is a common thing not only for a business world but also for doctor-patient relationship and sometimes even librarians cannot disclose what books were on your reading list.
To make sure you know the most about non-disclosure agreement after this post, here are a number of other cases when it can be necessary. Think of news releases and reviews, those can be confidential as well. Or maybe your business has client information for a specific company, that needs to be protected.
Secrets get real when someone has first-hand access to some information. Think of lab workers, who get to know the test results before anybody else. Since the legalisation of marijuana in many US states, positive drug tests are inevitable. You surely don’t want someone making a fuss about it and ruining the reputation of your company.
And finally, maybe you have an awesome business model that you plan to present to a venture in hopes to be funded. The NDA will help you feel safer in that case too.
If you want to keep your information secret, you better know how the ins and outs of a non-disclosure agreement. No matter if you are creating or signing it. It will prevent you from unwanted slip-ups that can turn into nightmares.