If you would like to protect sensitive information belonging to your business from getting into the wrong hands, a non-disclosure agreement (NDA) can help you achieve that. NDAs are legally enforceable contracts that create a confidentiality agreement between the person with the information and another who will gain access to it.
You can use a non-disclosure agreement to protect trade secrets or other valuable information crucial to your business. The key elements of a legally binding NDA are as discussed below.
The identification of parties to the agreement
When coming up with a non-disclosure agreement, the disclosing party with the confidential information and the recipient must be clearly defined. If there are any third parties involved in the NDA, they should be included in the agreement to avoid any ambiguity.
The scope of confidentiality and any exclusions
Confidential information should be a secret, and not even the recipient can use it. This needs to be part of the NDA alongside any exclusions. For instance, it may be difficult or impossible for the recipient to maintain confidentiality due to circumstances such as court orders or information available to the public. A proper NDA should include clauses that govern such instances.
The terms of confidentiality
Some key terms in a non-disclosure agreement include its length, the consequences of disclosing confidential information, and a severability clause in case information leaks out.
Getting everything right is crucial
Legal loopholes in a poorly drafted NDA can be costly to your business and any confidential information you seek to protect. It might not be legally binding to the recipient, and you may not have any recourse if your trade secrets are outed.
Therefore, it is crucial to make sure that you come up with a watertight document that protects the interests of your business.