Every business should protect proprietary information when dealing with independent contractors, vendors and other companies. The best way to do it is to use a non-disclosure agreement, frequently known as an”NDA.”
What’s an NDA?
An NDA is an agreement between two parties to safeguard confidential information disclosed in a business transaction. The proprietary information can include business procedures, financing, customer lists, and anything that is not already readily available in the public arena. If a party then breaches the NDA, the injured party can sue for damages, an injunction against further disclosure and attorney’s fees.
In most situations, just 1 party requires the protection given by an NDA. If you invent a new item, you’re likely to require an NDA from producers, vendors, etc., before you talk about the product together. While this may look like common sense, most companies don’t carry the idea through to their everyday activities.
Practically every company hires independent contractors, but they seldom obtain NDAs before disclosing information to the builders. By way of instance, do you use third parties to make or maintain your sites? Can you obtain NDAs from some of them? If not, what is to keep that party from using your business methods on other websites? A directional NDA can keep this from happening.
As the title suggest, a mutual NDA enables two parties to safeguard confidential information. The mutual NDA is typically used when two companies are negotiating a joint venture. Each party must disclose sufficient information to create the negotiations viable, but wants that information made public if the negotiations fail. If negotiations go well, further non-disclosure information will be integrated into the joint venture arrangement to safeguard additional information revealed during the joint venture.
Refusing to Sign an NDA
Alerts and warning lights should go off if a party refuses to sign your NDA. Unless they can provide an extremely compelling reason for the refusal, then you need to walk away from the company relationship.
Once an NDA is not really an NDA
Just because a record is titled,”Non-Disclosure Agreement”, doesn’t mean it offers you protection.
You need to always read the language of an NDA since the record may establish that you’re WAIVING all confidentiality rights. The waiver may be quite direct and read something like,”The disclosure of information pursuant to this Agreement shall not be regarded as confidential.”
Instead, the language might be more indirect and read,”The parties acknowledge and agree that all information exchanged pursuant to this agreement has been established in public forums.
Regardless, the”inverse NDAs” strip you of security and shouldn’t be signed.
Obtaining non-disclosure agreements ought to be a standard practice for your organization. Do not exposure your proprietary business secrets to other people with no protection.