When starting a new business venture, many entrepreneurs will most certainly want to protect their ideas or “secrets” from potential competitors and or outsiders. Whether its information that makes your product or service unique or innovative, intellectual property or trade secrets; business owners will inevitably have to share these secrets with other individuals or corporations the company collaborating with. A few instances where confidential information must be shared is to discuss the sale or licensing of a product, giving an employee access to the business’ ‘secret’ or presenting the information to potential investors.
Key Clauses of NDAs
In such cases, keeping information confidential and outside public knowledge through a non-disclosure agreement (NDA) will be essential. An NDA is a legally binding agreement between two parties where one or both parties will identify in a written document, the confidential information that will be prohibited from disclosing. NDAs do not need to be long and complicated, but if one has to be created, below are the keys legal clauses that all agreements should include
- The disclosing and recipient parties
- The definition of the confidential information
- The terms and duration of the agreement
- The permitted use of confidential information (reason for disclosure)
- The return of the information
- The remedies in case of breach by a party.
In sum, businesses will never know if someone is out to steal the idea or make the idea their own. Creating an NDA will provide the confidential information with security and prevent the recipient from disclosing any information listed in the NDA to any third party. If you want to protect “secret” from outsiders, consult with us by clicking here to have a professional attorney study your case.