Non-disclosure agreements (NDAs) are important documents to have in your business arsenal, especially when you need to protect confidential information and prevent it from being exposed to outside third-parties or the public.
In order to protect your business property and rights, you may choose to have your employees, contractors, and other business partners sign a NDA, also known as a confidentiality agreement, prior to engaging in business with them.
When You Might Use a NDA
Keeping private information private is the primary reason businesses use NDAs.
For example, if you’re considering forming a new business partnership, you may need to disclose confidential information in order to effectively convey your business idea. Prior to the presentation, you would have the potential business partner or investor sign a NDA as an assurance that they won’t steal your information (to learn more about the difference between NDAs and non-compete agreements, be sure to read this post
There are two common NDA formats – mutual agreements and one-sided agreements. Mutual agreements are typically used when confidential information will be shared by both sides. One-sided agreements are generally for situations when just one party will be sharing private information.
What to Include in a NDA
Prior to creating a NDA for your organization, you should consult a local commercial attorney who has experience with your type of business. NDAs, like most contracts, generally don’t come under scrutiny until you run into an issue or dispute – and then it’s too late to make changes to the document.
As you and your attorney draft your confidentiality agreement, here are some important elements to include:
- Identify the parties to the agreement – If you just have a disclosing party and a recipient, it’s fairly straight-forward, but be sure to consider if any other partners may be privy to the information and whether the NDA needs to cover those individuals as well.
- Identify what information is deemed confidential – Does everything you share (both oral and written) need to be confidential, or is the confidential information limited to specific information? Consult an attorney to determine how narrow or broad you want to be when determining what information needs to be kept confidential.
- Define the scope of the confidentiality obligation – Your NDA’s purpose is two-fold: to both ensure that the recipient keeps the confidential information private as well as ensure that they do not use that confidential information for individual gains. This should be clearly defined in your NDA.
- Define any exclusions – Identify situations that may be excluded from the agreement, such as when the information is already known to the recipient or the public, or if the recipient is required to disclose information through a legal process.
- Identify the terms of the agreement – Are there limitations put in place by the NDA including how long the agreement lasts? Many NDAs often have a time limit in place of up to five years, but it will vary by your business and industry.
Including these and other provisions applicable to your business situation are important ways to protect your private information and ensure confidentiality.
As you consider the needs for your Florida business, contact us at Silverberg|Brito, PLLC for help drafting important business documents and agreements.