What You Need To Know About Non-Disclosure Agreements

What You Need To Know About Non-Disclosure Agreements

A non-disclosure agreement, commonly referred to as an NDA, is a legal contract between a person who has sensitive information and a person or people who might gain access to that information. An NDA creates a confidential relationship between these two parties with the intent of protecting the sensitive information at hand. NDAs are legally enforceable contracts that everyone should be familiar with, should you ever agree to enter one. In this article, our team of attorneys in Fairfield, NJ will go over the NDA basics. 

What Do Non-Disclosure Agreements Protect?

Sensitive information:  NDAs make clear which information is considered protected, and which information is not protected. Both parties are under legal obligation not to share this information, or else they’ll be in breach of the contract. 

Patent rights: Pending inventions often need to be kept secret until they’re complete, so NDAs are often used to protect inventors while they’re developing new products.

What Are The Components Of Non-Disclosure Agreements?

  1. Identify the parties named in the NDA
  2. Define the sensitive information that must be kept confidential
  3. Explicitly state the obligations of each party 
  4. Clearly define the scope of the NDA
  5. Select a time frame under which the NDA is enforceable 
  6. Confirm if the sensitive information must be returned or destroyed
  7. Identify any exclusions
  8. Agree on what happens if the NDA is broken

Types Of Non-Disclosure Agreements

Unilateral non-disclosure agreements: One party agrees not to share sensitive information that both parties are aware of. 

Lateral non-disclosure agreements: Both parties have sensitive information, and they both agree not to share it. 

Benefits Of Non-Disclosure Agreements

NDAs give parties confidence to share sensitive information with other parties, without the risk of them leaking this information. Many businesses who work in highly competitive fields have their employees sign NDAs in order to protect important business information. If you’re a business owner and you’re worried about your staff sharing confidential information with outside parties, a non-disclosure agreement can protect you and your business. An NDA also makes clear what information is able to be shared, and what information must remain confidential. Information that is commercially or personally sensitive is enforceable by creating an NDA, so you have the peace of mind that you’re protected. 

If you’d like to learn more about non-disclosure agreements, or if you have any other legal questions, please contact our team at SCC Legal today and visit our website at: https://www.scclegal.com/


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