What to Know Before Signing a Non Disclosure Agreement

What to Know Before Signing a Non Disclosure Agreement

What to Know Before Signing a Non Disclosure Agreement

You might already know a thing or two about non disclosure agreements, more commonly referred to as NDAs. These agreements protect a business’s trade secrets or other sensitive information by establishing a confidential relationship with the other party. They also limit and restrict how to use or disclose confidential information. NDAs can protect everything from customer lists to plans for expansion – anything that the business wants kept secret to maintain an economic edge over their competition.

What Can I Expect in an NDA?

Any decent NDA starts out by defining confidential information for the agreement’s purposes. It might include situations where it is permissible to release this confidential information, such as during the course of a legal investigation. An NDA will also set forth the obligations of the receiving party. These obligations, in addition to requiring secrecy, typically include the destruction or return of anything containing this information save for your own memory. If the information only needs to be withheld for a certain time period – say, five years after the employee’s final date of employment – then include that in the agreement as well.

What are NDAs For?

NDAs have only grown more popular over the years and can apply to any number of different situations. An NDA can be mutual or one-sided. They can be standalone documents or included in other contracts, such as an employment agreement. Here are a few of the most frequent uses for a non disclosure agreement:

  • Employee and Independent Contractor Agreements: Perhaps the most common of all non-disclosure agreements are those between a business and its employees and/or independent contractors. They are especially popular with businesses dealing in sensitive or private information. However, even traditional businesses can benefit from NDAs, as they help keep trade secrets from the competition.
  • Venture Capitalist or Investor Agreements: In order to secure funding from a venture capitalist or other potential investors, you’re going to have to sell them on the validity of your ideas, which can often mean sharing information (product plans, finances, etc.) that would otherwise be kept under lock and key. With an NDA in place, you can prevent rival startups from stealing your plans for success.
  • Agreements with Those That You Do Business With: Your employees aren’t the only ones that you’ll want an NDA with once your business is up and running. You should also consider establishing agreements between you and any parties that you do business with. This is especially the cse if they have access to company property, virtual or otherwise.
  • Litigation or Arbitration Agreements: During official disputes such as those involved in arbitration or outright litigation, mutual NDAs are often signed to protect anything that might come during arguments or negotiations.

Should I Sign a Non Disclosure Agreement??

In the past, it’s possible that you might have signed a confidentiality agreement without even realizing it. This is why you need to carefully study any agreements or documents to see if they come with non-disclosure provisions. When asked to sign an NDA, read it before signing. If you have issues with its contents, you might be able to renegotiate the terms with the other party. It is of incredible importance that you understand the contents of any contract that you sign. However, if you’re still feeling uncertain, a local business lawyer is sure to be of use.

Looking to start a business or grow your current business? Contact FL Patel Law today by visiting our website or calling 727-279-5037.

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