Non-Disclosure Agreements (NDA)

Non-Disclosure Agreement Explained

In such a competitive world, which lacks an inherent sense of privacy due to overzealous media and unethical practices, preservation of such sensitive statistics has come to be the need of the times. A Non-Disclosure Agreement proves to be one of the most effective tools to provide security in this respect.

Before moving on to details, it will be a lot of help to bring out what an NDA is. An NDA is a legally binding agreement signed between an individual, company, entities, and even employees that designates some data as confidential, outlining the restrictions which include the flow of divulging it to the third party. As a confidential agreement, it acts as an important guard against data breaches within the modern-day competitive corporate arena.

The kinds of data/information typically protected by an NDA include: 

• Trade Secrets: Useful proprietary statistics in the form of business methods, formulas, and consumer lists. 

• Business and Financial Data: Confidential information related to the financial condition and sales level of a business enterprise and its advertising strategies.

• Intellectual Property: Information related to patents, trademarks, copyrights, or intellectual property.

• Personal Information: Private records maintained about people, such as identifying and medical information.

• Proprietary Software or Technology: Information concerning proprietary software programs, technology or innovations.

• Customer or Supplier Information: Information about customers or suppliers, including contact information and pricing records.

Types of a Non-Disclosure Agreement

There are basically three types of the NDAs individuals/businesses sign:

1. One-way or Two-way Agreement: In this case, it is a one-way agreement in the sense that only one party holds information which he intends to disclose to another party. The party having the confidential information is often termed the 'disclosing party' whereas the recipient is the 'receiving party.' In this case, the disclosing party is also making a promise and is therefore liable to perform it.

2.Two-way or Bilateral Agreement: With a bilateral NDA, there is mutual personal information to be shared and over which compliance by each party will be made to depend for the protection of each party's sensitive information. In such an agreement, both parties are obliged to maintain confidentiality over the information disclosed.

3.Multilateral Agreement: It is that kind of agreement in which there are three more parties, and one party is revealing exclusive information, and the other parties agree to protect it further.

Key Elements of a Non-Disclosure Agreement

A sound NDA must incorporate the following basic clauses:

1.The Parties: Understand clearly the kind of NDA (unilateral, bilateral, or multilateral) that is applicable and also provide information about the parties concerned, where names and addresses are included.

2.Term of the Agreement: Display the date of execution and tenure duration of an agreement period. It would also mention any obligation for the post-settlement period to keep the information disclosure open.

3.Confidential Information: Define what kind of data falls under the category of 'confidential' and requires safety.

4.Disclosure of Confidentiality: Explain the intended use of exclusive information and point out with whom it will be shared.

5.Dispute Resolution: Describe the procedures and techniques used in resolving disputes, alternative dispute resolution, and arbitration.

What Are the Advantages of Having a Non-Disclosure Agreement?

A Non-Disclosure Agreement (NDA) brings about mutual benefits from protecting the enterprise's secrets and techniques, that is, trade secrets and strategies, for the fortification of the client relationship developed in third-party projects where the happening of private facts is assured.

What both parties receive on signing the confidentiality agreement include:

1.Buys confidence between parties to give sensitive information.

2.Outlines what's being kept confidential and for how long.

3.Helps maintain an edge advantage over third parties by keeping information to oneself.

4.Legal document enforcing contract obligations between the parties in question.

5. Provides assurance by retaining vital business relationships.

WebLex’s Stance:

A Non-Disclosure Agreement, otherwise known as a Non-Disclosure or Confidentiality Agreement, is one of the most important assets for protecting sensitive enterprise information. WebLex makes convenient government interactions possible and allows for changes to agreements through our legal professionals. Our solution-based experts will help in all the questions you may have concerning NDAs, including but not limited to policies, terms and conditions, implications, negotiation, and dispute resolution.