Non-Disclosure Agreement

Non-Disclosure Agreement
Get advice for your Non Disclosure agreement from business law expert

Confidential Information to Protect? Here is What You Need to Know About Non-Disclosure Agreements


What is a non-disclosure agreement and when would I need to use it?

Non-Disclosure Agreement, commonly known as an NDA, is often encountered in employment contexts to protect confidential information. Other instances of use include business-to-business transactions such as a vendor performing services for a company.  In mergers and acquisition talks, businesses may want to keep negotiation details or trade secrets confidential and would often require an NDA to be signed by both parties.


Permitted Purpose

Often times, an NDA would spell out a clause called “permitted purpose” which will state what the main purpose of the NDA is. This will include context and what the information at hand is to be used for along with what the receiving party may do with the information. The contract will have a term when it begins and when the project is over and they stop receiving confidential info.


Who is involved in this agreement?

There are two parties involved, one is the “disclosing party” who is attempting to protect the confidential information, and the other is the “receiving party” (of the information at hand). As stated above, the parties can involve businesses, individuals, and employees of major corporations, especially companies dealing with consumer information, such as in healthcare, banking, or other areas.


What should I ask for as the disclosing party?

As a disclosing entity, you would want the NDA to have very broad and widely inclusive language. For example, disclosing parties often require all information received to be treated as confidential without exceptions.


What should I ask for as the receiving party?

When receiving information within a business agreement or as an employee, you would want the NDA to have specific language. This would include some exceptions to the NDA such as information you already had, the right to disclose information to your personal lawyers or other working professionals who advise/aid you.


How exactly will this contract be enforced?

Although vague at times, enforcement can involve monetary damages to the party that breaches the contract. “Specific performance” can also occur in which a court can order a party to comply with the contract and prevent further breach.


Non-Solicitation/No-Hire Clauses


Many NDAs have a non-solicitation clause/no hire clause which, for a certain number of years, prevents the receiving party from hiring employees from the disclosing party. This clause protects the disclosing party. Some NDAs would also involve a non-compete clause preventing the receiving party from using confidential information and competing against the disclosing party.


Contact FT Law Firm for assistance with Non-Disclosure Agreements and other business agreements. 




Leave a Reply

Your email address will not be published. Required fields are marked *