Ever wondered by NDAs are important? What are they? What role do they play in growing your business or startup? Benefits of having an NDA? These and more questions will be answered with a special giveaway in this #lenomasnippet!
There are many benefits and advantages for using an NDA that you will hear on this podcast:
1) The most obvious advantage of an NDA is protecting your information!
An NDA agreement allows you to agree on what information can and cannot be disclosed to others;
what each party’s obligations are in regards to the confidential information;
and how information is dealt with upon termination of the NDA.
2) An NDA agreement can allow parties to define what “confidential information” is, so that it is clear to both parties throughout their relationship what is considered confidential and what subsequently cannot be disclosed.
What type of information can be considered ‘confidential’ is endless, and it can include anything from patent ideas, test scores, employee information, passwords etc.
Setting out what is included as confidential information can save a lot of time in the event a dispute arises and a lawsuit is brought, as the judge can see whether the information disclosed is specifically listed or described in the NDA.
Drafters of the NDA can be as precise as they wish when defining what is confidential in their agreement by including an exhaustive list of specific items.
Others will want a broader, non-exhaustive list which may include language such as “all information disclosed in the course of fulfilling the purpose of the agreement”.
Drafters can also include exceptions to the prohibitions on disclosure such as information that is generally available to the public;
information obtained by a third party who is not bound by any confidentiality agreements;
where information is trivial;
information developed for the recipient independently;
information disclosed through no fault of the recipient party and information that was already known by the party before signing the NDA.
These exceptions are common in NDAs.
3) A well-drafted NDA will outline the consequences for those that breach the NDA, which will likely include a hefty monetary fine.
The party that breached the NDA can also be subject to a court order preventing them from continuing to disclose any confidential information that was protected by the NDA.
4) An NDA assures parties that information will remain confidential, and can include survival provisions requiring the party to not disclose the confidential information for a stated time period (eg. 2 years) after their relationship has ended.
Schedule a consultation with us on info@lenomalegal.com so we can assist you with your legal matters.