Trade secrets and intellectual property can be the most valuable assets for a company. Therefore, it’s worth drafting a strong agreement to protect them. A non-disclosure agreement (NDA) does just that. It is a legally binding contract in which a person / business promises to treat specific information as a trade secret and not disclose it to others. You may run into even more names for this type of agreement, such as a confidentiality agreement, proprietary information agreement, secrecy agreement, and confidential disclosure agreement.
The name doesn’t matter; what does make a difference is that your agreement contains the necessary components. NDA provisions must be narrowly tailored to serve the legitimate interests of a business. Overreaching can result in the agreement being invalidated, so skilled drafting is essential to ensuring a legally enforceable contract. State law varies widely on the mechanics and validity of NDAs. Using qualified legal counsel to help you draft your NDA is strongly advised.
Doing it yourself opens the door for mistakes. What appears as an unnecessary expense can ultimately save you money when you consider the cost of a clean up project.
It saves you time
Drafting a bulletproof NDA can take some time, especially if you’ve never done it before. As a business owner, you need to continue growing your company and leave the legal stuff to the legal experts.
Learn about other forms of IP
Chances are your company has valuable intellectual property. By hiring an attorney, you’ll have the ability to learn about how and when to protect your IP.
What is a trade secret?
A trade secret is any confidential business information which provides a company a competitive edge.
What provisions are commonly found within an NDA?
It’s important for an NDA to explain which information is confidential. A well-written NDA should also include the term of the agreement, the jurisdiction of the agreement, the purpose for disclosure, and ownership of the trade secrets. NDAs may also include non-solicitation and non-circumvention clauses. Non-solicitation clauses can apply to customers and employees. Non-circumvention clauses protect entrepreneurs from others acting on their idea without acknowledging or compensating the entrepreneur.
What’s the difference between a unilateral NDA and a bilateral NDA?
What provisions are A unilateral NDA (also referred to as a one-way NDA) is when the receiving party of the confidential information is bound to protect such information. On the other hand, a bilateral NDA is when both parties supply information and agree to keep it a secret. These agreements are common for businesses that are considering a merger of some sort. Many attorneys advise on a mutual NDA in all cases in order to draft the provisions to be equitable for both sides in the event the information-receiving party later becomes a disclosing party. found within an NDA?
When does an NDA end?
The term of an NDA is typically one to three years, but it depends on the industry in which it operates. An NDA may also end if the company fails to keep the information confidential.
Can I use a free NDA that I found online?
It’s possible the NDA will protect your company against disclosure. But it’s also possible that, like many free templates you’ll come across online, it’s unenforceable. When dealing with valuable assets like trade secrets it’s not worth the possibility of having an unenforceable contract.
Talk to a LawTrades Expert email@example.com (646) 781-7197