Home Agreements Some Important Points of a Non-Disclosure Agreement

Some Important Points of a Non-Disclosure Agreement

May 1, 2019

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Every company has some of its secrets or confidential information which they protect from disclosing to someone else. But in some situations, it become necessary to disclose such information to someone else. Then role of non-disclosure agreement come in picture. It is an agreement in which a person / business promises to treat specific information as a trade secret and not disclose it to others. It’s important to note that an NDA will not protect trade secrets if the trade secret owner has not taken reasonable steps to keep the information secret. So, basically non-disclosure agreement, or NDA, is a legal document between two parties that protects sensitive information.

Some Important Points of a Non-Disclosure Agreement

Agreements

With a unilateral NDA, one party is agreeing not to disclose the other party’s confidential or proprietary information to third parties or to the public in general. It’s called “unilateral” because the agreement is one-sided with only one party making the promises to protect data.

Mutual Agreements

Mutual agreement is entered when both the parties to contract have confidential information to share while in Unilateral agreement only one of the parties makes the disclosure.

What should be included in the NDA?

NDA can be of two types-

Define what is Confidential- This will be the first task in such agreement to defined that what information should be considered as confidential and what not. The agreement should be clear so as to avoid future conflicts or confusion.
Parties- The agreement should clearly disclose the name of parties who are entering into such NDA. Parties can be more than two so it is important to mention name of each party.
Term of confidentiality- NDA should mention the terms of confidentiality it means the time period for which such agreement will last. There is no fix rule for setting time period of a NDA as a company can set it according to their own need. Some of the peoples are of view that longer the term of confidentiality larger the time period will but some have other views. So, it differs from company to company.
Use of confidential information- It is also very important that NDA shouldmention the scope of the confidential information it means that to whom such confidential information can be disclosed and in what situation such information can be disclosed to such named person.
Mandatory/legal disclosure- sometimes a situation came when it become legally important and mandatory to disclose such information to government agencies. So, NDA should mention such condition where mandatory disclosure of the contract of NDA will not be termed as breach of contract.
Remedy- It must be clear in agreement that in case of breach of contract what remedies should be paid by the party who have done such breach.
Jurisdiction– The agreement must specify which court will have jurisdiction over the parties in case of breach of such agreement.
The return/ destruction of the information- The agreement should include the process which should be followed after the maturity period of the contract.
Non-Solicit and Non-Hire- The non-solicitation provision prohibits the potential buyer (and sometimes its representatives) from soliciting or otherwise inducing target company employees to terminate their employment in order to work for the potential buyer. It is also one of the important clause which must be there is a NDA.