Because information as well as ideas are usually an business’s most important asset, additional steps must be taken to protect it.
Confidentiality and Non-Disclosure Agreements are essential agreements used to protect an individual or company’s sensitive information and proprietary ideas.
A Confidentiality Agreement, additionally known as an NDA, essentially acts as a document shield, preventing your company information from being revealed to your competitors. Though, its power derives entirely from its capability to make potential disclosers think twice prior to giving the game away. The clearly specified threat of severe legal action is usually enough to ruin the plans of a former employee, business partner or third party to use your proprietary information for personal gain.
Yet your confidentiality arrangement will just work as a deterrent if it’s composed and also executed effectively.
1. Don’t use template agreements from the Internet
Templates are fine, as long as you use them as just that: a template. The trouble with using templates is that lots of them on the Internet are generic and will likely fail to meet your requirements.
Your absolute top priority when drafting your confidentiality arrangement is to be specific and take into account the special aspects of the industry, deal, arrangements, and the needs of the parties involved.
You can also easily find a variety of NDAs online from huge companies as well as market leaders. Reading these examples can give you some understanding of what believed leaders are doing to protect their work, which conditions you need to include, and also what language is being used by others in your job. McKoon, Williams, Atchley & Stulce, PLLC has rich experience of drawing up such agreements and will advise what else should be included.
2. Do not be ambiguous
Among the greatest mistakes is to compose your confidentiality agreement with language that’s overly broad or too vague.
If your agreement encounters scrutiny in court as a result of a violation, there’s a high risk that your arrangement will be considered to be “void for vagueness” if the used definitions are uncertain or vague thus making it impossible to follow its terms and conditions
3. Include Third Parties
One more typical omission is forgetting to include the third parties. Disclosing Parties are frequently so concentrated on protecting themselves from one of the most immediate hazard, that they neglect to look and take into consideration other parties who may be included.
For instance, your may be contracting with a programmer to assist get your new exclusive software program prepared for the general public market.
The programmer, the instant Recipient Party of your secret information, likely doesn’t function alone. The programmer may contract 3rd parties to perform part of their services.
If your Confidentiality Agreement does nothing to hold those people to confidential standards, then you risk leaving an open hole in your protection. Do include all involved.
4. Set a time frame
Another usual trap when it comes to NDAs is not setting a reasonable time frame for how long the duty of confidentiality must last.
Some entrepreneurs make the mistake of creating an unrealistic duration, while others fall short to include this detail completely.
The significance of this period is that it aids to establish a definitive obligation for the Recipient Party. Otherwise you risk having your NDA nullified in court since it’s simply too unclear to be imposed.
Do be realistic. While you are justified in your intention to protect your information, you also have to be reasonable otherwise the Recipient Party might find no point in signing your agreement at all.
Bare in mind that some confidential information has a finite lifespan. Trade secrets must not.
5. Don’t delay signing
Some business owners feel uncomfortable broaching the topic of signing a confidentiality agreement while others take an even more careless attitude and wait until the discussion “gets more serious.”
The risk in waiting is that, for one, early conversations can easily include pieces of secret information. A discussion can quickly escalate, especially if the parties are eager or excited.
The last point you want is to stop a great exchange of your thoughts dead in its tracks since you understand you cannot say much words without revealing something important. Simply put, even if you didn’t intend on having a comprehensive discussion right away, it might easily happen in the heat of the moment.
It’s also crucial to bear in mind that anything you state, even in preliminary conversations, can be at risk to disclosure. So even if you seem like you’ve been very careful about what you say, there is a chance that the other party took something seemingly insignificant that you stated and ran with it.
Do sign a confidentiality arrangement upfront. While it may not be possible to learn about every conversation before it takes place, you reasonably know about vital conversations beforehand, especially with designers, staff members, potential business partners, etc.
McKoon, Williams, Atchley & Stulce, PLLC functions as “general counsel” to many clients offering legal advice that is driven by the needs and pace of business. Non-disclosure agreement is the document that can save your business and guarantee its top place in the industry. Legal help is vital here. Contact our corporate lawyers to draft the agreement that will protect your information.