Business owners often need to discuss sensitive information with outside individuals. For example, sharing proprietary information may be crucial when hiring key employees, obtaining new clients, seeking investment, or finding potential business partners. How do you keep your business protected in these inevitable situations? With a Non Disclosure Agreement.
What is a Non Disclosure Agreement?
Non Disclosure Agreements (“NDAs”) can be an extremely useful tool for all types of business relationships. An NDA, also commonly referred to as a confidentially agreement, is a legal contract that outlines confidential material, knowledge, or information that may have to pass between individuals as a result of the business arrangement. Having an agreement in writing and signed by all parties can lend trust to business negotiations and deter theft of intellectual property.
Depending on the terms set forth in the NDA, the parties essentially commit not to disclose confidential business information to any third party except in accordance with the rules stated in the contract.
Why Do you Need an NDA?
- Allows You to Define Confidential Information: Defining confidential information is the first step in ensuring the information is protected. All effective NDAs will contain a clause defining what constitutes “confidential information.” This allows you to protect things that are important to your business, such as trade secrets.
- Allows You to Set and Enforce Consequences: NDAs provide a clear and legitimate legal recourse should the contract be breached through the unlawful dissemination of confidential information.
- Preserving Business Relationship: NDAs provide peace of mind – you know your confidential information is safe. All parties in the business relationship are on the same page and 1) know what confidential information is being protected and 2) know what the potential consequences are for breaching the agreement.
For more information or help drafting your contact DuFord Law today.