Answering the top 4 questions about nondisclosure and confidentiality agreements
A nondisclosure agreement (NDA) and a confidentiality agreement are one and the same. They are generally administered in business settings with a contract to avoid sharing company trade secrets, which is information that a company wants to keep under wraps from its competitors. The contract serves as a legal obligation for the two parties involved.
Here we are answering the top 4 questions about these agreements:
- What do they protect?
While NDAs protect all parties involved, their central focus is the interest of the company that wants to keep specific information from becoming public. If certain sensitive information listed within a confidentiality agreement is made public, it could be used to hurt others outside of the organization, such as clients and customers. Confidentiality agreements protect the personal information of both the clients and the customers. In addition, information pertaining to a new product or invention that is leaked could void the patent rights of the inventor. If an inventor holds an NDA for the details of their invention, their patent will remain protected.
2. What are the elements of a nondisclosure?
NDAs must contain definitions, exclusions, named parties, and time periods.
Definitions are generally the categories and topics of what information needs to remain confidential, rather than the exact details of the information. An example would state that “personally identifiable information, financial information, and purchase history of the employer’s customers must not be shared.”
Information that is unnecessary to be included in the confidentiality agreement can be listed as an exclusion.
- Named Parties
The agreement must state the named parties that are held accountable for the information they received. These individuals must not share the information in any way, on purpose or by accident.
- Time Period
A time frame must be determined for the individuals involved to keep information private for a specified number of days, months, or years.
3. When would you need one?
Confidentiality agreements are very common in most business practices today. An individual will typically have an NDA in situations of doctor-patient, lawyer-client, employer-employee, business owner-client, and even for business owners presenting to prospects. It is recommended to have some form of confidentiality agreement whenever an individual is about to disclose information that they would otherwise not want people to know.
4. How do you implement?
In order to implement a nondisclosure agreement you will want to know what information must be defined, who will be involved as well as the ideal timing to create this agreement. Work with an attorney to map out the agreement and be sure all your bases are covered. Anselmo Lindberg & Associates works with businesses of all sizes to help clients draft, review, and negotiate their nondisclosure and confidentiality agreements. Contact us to get started on your contract implementation.