Why have an NDA or confidentiality agreement?
Ensure that the parties are legally obliged to keep private and confidential certain information which may be disclosed to one another in relation to a certain transaction, matter, job, employment, service, etc.
Common situations where an NDA is appropriate
- Discussing a business idea to a potential partner or investor
- Pitching an inventor to a potential investor or distributor
- Disclosing financial, marketing, operations and other information to a potential buyer of your business / company
- Presenting a new product or service to a potential buyer or licensee
- Engaging a vendor, supplier, contractor, whether a corporate or individual person, who may be given access to your organisation’s confidential information in order to provide those services
- Employees who have access to confidential information, trade secrets, intellectual property, belonging to your organisation during the course of their employment
Mutual or Unilateral NDA
An NDA or confidentiality agreement may be:
- mutual / two-sided; or
- unilateral / one-sided.
If it is mutual or two-sided, then two or more contracting parties foresee that they will be exchanging confidential information and agree to keep confidential such information.
If it is unilateral or one-sided, then only one party is disclosing confidential information to the other so the recipient party is obliged to keep confidential such information.
Elements of an NDA
- Details of the parties
- What matter it is that the relevant confidential information is being disclosed
- Definition of confidential information
- Terms of the confidentiality obligation by the recipient party
- Exclusions from confidential obligation
- Term (duration) or termination