Every business should protect proprietary information when
dealing with independent contractors, vendors and other businesses.
What is an
NDA?
An NDA is an agreement between two parties to protect
confidential information disclosed in a business transaction. The proprietary
information can include business methods, finances, client lists, and anything
that isn’t already readily available in the public arena. If a party
subsequently breaches the NDA, the injured party can sue for damages, an
injunction against further disclosure and attorney’s fees.
Directional NDA
In many situations, only one party requires the protection
provided by an NDA. If you invent a new product, you are going to need an NDA
from manufacturers, distributors, etc., before you discuss the product with
them.
Practically every business hires independent contractors,
but they rarely obtain NDAs prior to disclosing information to the contractors.
If not, what’s to keep that party from using your business methods on other
sites? A directional NDA can keep this from occurring.
Mutual NDA
As the name suggest, a mutual NDA allows two parties to
protect confidential information. The mutual NDA is typically used when two
businesses are negotiating a joint venture. Each party must disclose enough
information to make the negotiations viable, but neither wants that information
made public if the negotiations fail. If negotiations go well, additional
non-disclosure information will be incorporated into the joint venture
agreement to protect additional information revealed during the joint venture.
Refusing to Sign an NDA
Alarms and warning lights should go off if a party refuses
to sign your NDA. Unless they can provide a very compelling reason for the
refusal, you should walk away from the business relationship.
When An NDA isn’t really an NDA
The waiver might be very direct and read something like,
“The disclosure of information pursuant to this Agreement shall not be considered
confidential.” Alternatively, the language may be more indirect and read, “The
parties acknowledge and agree that all information exchanged pursuant to this
agreement has previously been established in public forums.” Regardless, the
“reverse NDAs” strip you of protection and should not be signed.
Obtaining non-disclosure agreements should be a standard
practice for your business. Don’t exposure your proprietary business secrets to
others without this protection.
Richard A. Chapo is with SanDiegoBusinessLawFirm.com - This
article is for information purposes only. Nothing in this article is intended
to address the reader’s specific situation nor does it create an
attorney-client relationship.
1 komentar:
Good points you have made here. Thanks.
Agreements
Post a Comment and Don't Spam!