Businesses often use non-disclosure agreements when they are entering a negotiation with another business. It is a confidential agreement between the parties and allows them to share sensitive information with each other. They agree that the information will not be shared with others.
The business may want to safeguard proprietary information, customer data, sales plans and other details from competitors. If the party who agrees to keep the information confidential breaches that agreement, the business can sue them or ask the court to prevent future disclosures.
Required elements
The non-disclosure agreement must contain the names of the parties, how confidential information is defined as it relates to the information they want to safeguard, confidentiality exclusions or an explanation of information that is allowed to be disclosed, the time period of the agreement and any other applicable sections.
Typically, non-disclosure agreements are in place for one to ten years, however they may be applied indefinitely if the parties decide to do so. It will also commonly include a statement that the parties agree to return the physical form in which the information is expressed when the agreement expires.
Advantages and disadvantages
Some businesses view a non-disclosure agreement as starting the relationship off without trust. However, the agreement keeps information private, it is generally inexpensive to create and can be short, it can outline the consequences of a breach and by signing it, both parties are aware of the information that can and cannot be shared. This helps support open communication between them.
If a business needs help to create a non-disclosure agreement, an experienced attorney can help.
Subscribe To This Blog’s Feed