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Protect information about your business with a Non Disclosure Agreement

business, Commercial, Contract

You may need to share important information about your business with potential partners such as investors, manufacturers, suppliers, marketing agencies, financial advisers.  It is vital that you do not assume that the information shared with these third parties is confidential.  You need to take steps to ensure that you  you protect against the risk of  third parties using confidential information about your business, or potentially passing it to competitors.  You can do this by entering into a legal contract called a Non Disclosure Agreement (NDA) also known as a Confidentiality Agreement.

A clear and concise NDA allows you to share ideas and information- “confidential information”- about your business with third parties.

 What is “Confidential information”?

“Confidential information” is generally considered to be anything that is not in the public domain.  This could cover a wide range of information about your business and how it operates- from ideas, techniques and know how; to important documents such client lists.

An NDA can protect “confidential information”, but once the information is in the public domain it is no longer confidential and so it cannot be protected.  Any NDA needs to clearly set out what is considered as “confidential information” so that the boundaries of the agreement are set and the information can be adequately protected.  This can be done without actually disclosing the “confidential information” itself (keep in mind that the agreement itself is not always confidential). For example “confidential information” could be defined in an NDA as all client lists and past purchasing records- but the definition does not have to provide the actual names of the clients or their past purchases

confidential info

Purpose

An effective NDA should restrict the use of “confidential information” to a specific purpose.  All other uses should be clearly prohibited to prevent the information from being used in any other way.  For example if you were in discussions with another business about entering into some sort of joint enterprise, then the purpose of the use of the “confidential information” would be limited in the NDA to the discussion of a joint venture.

 

Time limit

Most NDAs set a time period during which party receiving the “confidential information” must maintain its secrecy. This time period can be set by inclusion in the NDA of a specific time period- three years is a common length. Or the time period can be set in the NDA by the occurrence of a future event- for example the introduction to the market of a particular product- at which point the NDA will end.

Protection

An NDA provides legal protection for the “confidential information” of your business as long as it is covered in the agreement.  If another party breaches the NDA in place then your business would have the right to take legal action against them.

If the receiving party misuses the “confidential information” covered under an NDA then you would be entitled to take this party to Court and sue them for damages for breach of contract.  If you suspect that the receiving party may be about to breach the NDA then you can apply to Court for an order known as an injunction to stop this from happening.

We can help

NDA’s can provide your business with crucial protection to prevent other parties with whom you share confidential information in the course of business from misusing it for their own purposes or sharing it with your competitors.

NDA’s can provide your business with crucial protection to prevent other parties with whom you share confidential information in the course of business from misusing it for their own purposes or sharing it with your competitors.

If you require an NDA for use in everyday business then contact a member of our business team on 01623 663246.  We offer fixed fee legal services for our business clients.  Take a look at our Fixed Fee menu for more information.

 

 

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