Protecting your assets from theft is not just about installing security cameras or buying a repository safe; the greatest losses can actually come from having your immaterial, intellectual property (IP) stolen from you. This is why we are big advocates of signing a non-disclosure or confidentiality agreement, a legally binding contract that is intended to secure and protect your intellectual property. Because it is such a key document, here is why it is a good idea to have it checked by your lawyer.
This is what you need to build in the NDA or confidentiality agreement.
We have covered the basic definition of an NDA or confidentiality agreement here, so take a peek if you are unsure about what an NDA is and whether you need one.
Today, we are covering the main stipulations your confidentiality agreement should by all means contain:
Depending on the specifics of the situation, your NDA should specify whether it goes in one or two ways: while some agreements only cover disclosure of confidential information by one party, others cover disclosures by both. If you are not going to receive confidential information from the other party – and you are absolutely positive that it will stay that way, a simple unilateral agreement may be a better choice for you.[tweet_dis_img][/tweet_dis_img]
Definition Of Sensitive Information (And Potential Exceptions)
In this particular case, what constitutes sensitive information? “The definition of confidential information section lists the types and categories of confidential information protected under the agreement. This section must establish the type of confidential information without actually revealing it.”, describes Investopedia.
Generally, the disclosure of confidential information will want it to be defined broadly; but the receiver will aim for the opposite, i.e. to narrow down the legal definition of confidential information in order to best protect their interests. If you are the person who discloses the information, make sure you encompass a wide enough description of what constitutes, or could constitute, confidential information.
Protection Of Sensitive Information
The very gist of an NDA is stipulating how sensitive information is to be protected. The two-part obligation on the receiver of the information includes, 1) keeping the confidential information confidential, and b) not using the confidential information itself. You also have the right to define right to take proactive action for each party in case they breach one or more of the stipulations.
If a disclosure is required from the recipient of sensitive information by the law, he or she is obliged to do so; however, the discloser may request that they are informed about it as soon as possible. Richard Harroch writes for Forbes that “the recipient should be allowed to do that (disclose the information in a legal process) if forced by court order without breaching the NDA, as long as the recipient has warned the disclosing party in advance of the legal proceeding.[tweet_dis_img][/tweet_dis_img]
End Of Confidentiality Agreement
While NDA’s normally have terms of 3-to-5 years, this will heavily depend on how strategically important this information is to the discloser. You should also note that the term of NDA is not always the same as the term of contractual obligations.
This is why Peter Minton from Minton Law Group advises to be as specific as possible: “When they are appropriate, it is important to have a set termination date and clear provisions regarding what the party’s rights and responsibilities are once the agreement has terminated. A grey area here is bad news all around.”
Need A Bespoke NDA Or Confidentiality Agreement?
We can create a bespoke NDA or confidentiality agreement for your business. Find out more by clicking the image below.