BY DEAN FENDI NEWS APRIL 12, 2019
What is an NDA/ Confidentiality Agreement and why should I have one?
Nondisclosure agreements (NDAs) are in the news and seen to be controversial documents as they can be perceived as a catch-all term for agreements that include confidentiality clauses.
From a business perspective NDAs are crucial to protecting your company's sensitive business information, whether this be confidential and proprietary information disclosed internally, or in the course of engaging with external business parties.
NDAs are also commonly referred to as Confidentiality Agreements (CAs) or Confidential Disclosure Agreements (CDAs).
In its most simple format, an NDA is a legally enforceable contract that creates a confidential relationship between a person who holds some kind of business or trade secret (or other information) - the Disclosing Party, and a person to whom the secret will be disclosed. NDAs protect sensitive information - the Receiving Party.
What value does an NDA add to my business?
Businesses can obtain substantial value from sharing their confidential information and data, including proprietary trade secrets:
- In connection with exploring new corporate options such as acquisitions or commercial strategic alliances.
- Internally among their employees in the ordinary course of daily business.
- With customers, supply chain, and other external business parties or individuals in a wide variety of commercial transactions and relationships such as intellectual property, purchasing or selling assets, goods, or services.
The format of a typical NDA
Each NDA will look different, some are one page documents, others depending on the complexity and transaction involved can be three to four pages or longer.
An NDA is essential for any business for managing the disclosure of sensitive commercial information both internally and to other parties. A typical NDA sets out:
- The type of information being disclosed.
- Restrictions on the Receiving Party's use, disclosure, and return of a disclosing party's confidential information.
- The concerned parties' rights and obligations.
- Duration of the NDA.
- Non-circumvention to prevent the Receiving Party contacting a party introduced by the Disclosing Party.
The most effective NDAs are those tailored directly to the concerned parties' business requirements to reflect the business purpose or transaction for which information is to be shared.
In addition to safeguarding sensitive confidential information, businesses are contractually responsible for protecting information that other parties disclose to them.
We can provide you with a tailored NDA template for your business. We also can provide other documents such as standard commercial sale or purchase agreements, simple letter agreements or a specifically required document tailored for your business needs.
Should you have any questions or require an NDA suited to your business requirements please send a message on the Contact Us link.
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