A Non-Disclosure Agreement (NDA) is a legally binding document that protects your business by ensuring that employees and other people involved with your business are not allowed to disclose sensitive information about your business, clients, and operations to the public.
Any information that you deem important to the profitability of your business needs to be included in an NDA. Without non-disclosure agreements, you won’t be protected and in any cases where it goes to court, you won’t have a leg to stand on.
The facts are that if you don’t have an NDA, you’re running a leaky ship that can be exploited.
Protect Trade Secrets With Non-Disclosure Agreements
Trade secrets are those that are deemed to be valuable to the operation and overall profitability of the company. However, you can’t just say that something is a secret and then think that it has some legal value.
It’s kind of like the situation with patents. You can’t just say some new technology is patented, you have to take legal steps to intellectually protect it. Trade secrets are the same. What you must do is create an NDA that strictly include the information you want to remain a secret.
Only then can you be guaranteed it’s protected.
Non-Disclosure Agreements Prevent Employees Misusing Company Information
One of the big reasons you must use an NDA is to make sure employees don’t use any company information for their own gain. Many employees within your company probably have access to sensitive information regardless of their position.
The idea with an NDA in this instance is to ensure that no employees will reveal any important company information to the public domain, and if they do, then you can claim a breach of contract, which is backed up legally.
Whenever there is a relationship where confidential information is being traded or discussed, there should be an NDA in place.
This isn’t just relevant to your current employees either. There are unfortunate incidences where an employee may quit a company and feel disgruntled about some issue. They may even feel like revealing some of this confidential information to the public that could affect your business.
If you don’t have an NDA in place, then you’ve got no chance of being able to prevent former employees from revealing any of this information.
Non-Disclosure Agreements Define What’s Confidential And What Isn’t
There is no doubt that the line between what is and isn’t confidential information can become blurred and this is where non-disclosure agreements can be your saving grace.
This a problem an NDA can solve. An NDA puts into writing what is and isn’t considered to be confidential information so that both parties will know where each other stands. Then there is no case to be made if ignorance is pleaded.
For example, you may like to include something like a customer database. It could be specific information about a group or groups of customers for the business. It could be names, customer purchase records, financial information about the business, and much more.
The important thing is that it’s clearly stipulated in the NDA so both parties know where they stand, and know what is and isn’t considered protected confidential information.
Non-Disclosure Agreements Specific To Your Business
You’ll now see many legal firms offering a one-size-fits-all approach template for NDA’s. At first glance, this can seem like the solution to getting a legally watertight NDA created but you need to read between the lines.
They are NOT specifically created for your business and your business’s needs. They may not cover all necessary areas you want to be covered and they also many not clearly stipulate the kind of legal action that will be taken if a breach of contract occurs. And this is very important.
It’s one thing to legally define in the document what is and isn’t confidential, it’s another to define clearly what actions will be taken. Every NDA needs to be specific and customised to guarantee legal protection.
As long as your NDA is specifically designed to meet the needs and requirements of your business then you can be confident your secrets and confidential information will be protected legally.
Closing Thoughts: Non-Disclosure Agreements And Your Startup
Hopefully, now you realise why your business needs an NDA.
Without one, your business is not protected and in today’s world, all efforts need to be taken to protect information crucial to running a business. As we alluded to in the final point, one of the easiest mistakes business owners can make regarding NDA’s is to get a one-size-fits-all template.
However, to be truly protected you need something customised according to your business’ specific needs and requirements. That’s where we can help you. Don’t leave your business legally naked without legally valid non-disclosure agreements.
Click below to find out more about creating an NDA that protects your business and gives you peace of mind your secrets remain a secret.