The Importance of an NDA for Your Business
Business law and contracts are crucial for protecting your business in Coral Springs, Parkland and all over Broward County. However, many business owners fail to realize the importance of using Non-Disclosure Agreements (NDAs) to protect their competitive advantage in the marketplace.
If you are not using NDAs for your business, keep reading to find out why you need to contact a Coral Springs business law attorney now to create an NDA and also insert NDA clauses into your existing business contracts.
What is a Non-Disclosure Agreement?
One of the most valuable assets your company possesses is the intellectual property you have developed throughout the years. A non-disclosure agreement (NDA) or confidentiality agreement is a written contract that protects your intellectual property. When drafted and executed correctly, the NDA is legally enforceable in court.
Some contracts may include NDA or confidentiality clauses, but a stand-alone NDA is often best because it is more detailed than a clause in a contract.
Furthermore, it is more difficult to argue that you were not aware of the NDA if it is a separate contract that you signed, in addition to any other contracts you might have with a company.
In its basic form, an NDA creates a legal obligation between the parties to maintain the privacy and secrecy of information shared by the parties. In other words, you agree to keep a secret.
It forces parties into a legal framework to maintain trust regarding the disclosure of sensitive or proprietary information. It also gives a party the right to seek compensation for damages, injunctive relief, and other remedies ifthe other party breaches the terms of the contract.
Why Is It Necessary to Disclose Trade Secrets and Other Sensitive Information?
It is often necessary to disclose information with employees that you may not want competitors to know so that the employees can perform their jobs. If you are developing a new product or manufacturing process, you may need to share information with contractors, consultants, and other parties who might be working on the project.
You might also need to share intellectual property when you are seeking funding or capital for a new invention or idea. Some companies may need to share information about new ideas and technology with third-partyproviders.
Regardless of why you need to share information with other parties, you risk the chance that those parties might use the information for their benefit and profit.
An NDA holds those parties to a high standard of confidence. It also holds the parties legally liable if they disclose the information or use the information in any way that is prohibited by the terms of the NDA.
What are the Key Elements of a Non-Disclosure Agreement?
Several basic elements must be included within the agreement to ensure that your NDA will be enforceable in court. Some of those key elements are:
- Identification of each party subject to the agreement. If the party receiving the information will need to disclose the information to third parties, those parties should be includedin the NDA.
- Description or definition of what the NDA protects.This section of the NDA should describe what is meant by “confidential” or “protected” information. While you want to include details about the protected information, you also want to keep the section as broad as possible so that the other party cannot find a loophole to use the information without legal liability.
- Obligations and duties of the recipient of the information.The core of the NDA agreement defines how the recipient of the confidential information will protect the secrecy of the information. It also contains an agreement that the recipient will not use the information for personal uses.
- The NDA should also cover exclusions from the confidentiality agreement. Exclusions may include information that is publicly known; information that was disclosed to the recipient by another party; information independently developed by the recipient without use or reference to the confidential information; and, information that is already known by the recipient.
- The NDA should have a definite term for how long the NDA will last. A definite term is especially important for the recipient who may not want to incur the expense of protecting information forever. However, the agreement should also specify that the end of the term, you are not giving up your rights under intellectual property laws, copyright laws, or patent laws.
- In many cases, an NDA specifies the jurisdiction for a dispute. In other words, where will a lawsuit be filed if the parties have a dispute?
The above elements do not constitute an exhaustive list of the clauses that should be includedin an NDA agreement. To protect your company and your intellectual property, you should consult with a Coral Springs business law attorney to discuss non-disclosure agreements and confidentiality agreements in detail.
Call Matthew Fornaro, P.A. for More Information
If you want to learn more about protecting your trade secrets and intellectual property, contact our office to schedule an appointment with an attorney. Matthew Fornaro assists companies and individuals in Coral Springs, Parkland, and Broward County in matters related to business transactions and business law.
To request a consultation, call 954-324-3651 or contact us online.