Effectively Preserving Sensitive or Confidential Information
Residing in an era of fast and easy communication and widespread media influence, getting information is a simple task. Such expediency in information results is a doubled edged sword, as it is ever more difficult to keep trade secrets and confidential information from the public domain. Failing to keep private confidential or private information poses great economic risks to businesses who have invested time and resources in developing such information. Attorneys who specialize in contract law or business law can prepare for you agreements to protect your intellectual property. These types of agreements are called Non Disclosure Agreements, NDA.
Confidentiality in the business environment
Businesses have a lot of information, formulas and strategies which they would prefer not getting leaked. With so many interactions and agreements with other business entities or individuals, there are many risks in having the right information leaked to an unintended party. Therefore it becomes all the more necessary to make use of Confidentiality agreement such as NDA’s (Non Disclosure Agreement) when forming business agreements.
NDA’s are very common agreements between two or more entities who wish to keep the privacy of their respective information. For example in case of a merger or acquisition deal between two or more companies, all the involved parties are often required to enter into a non – disclosure agreement which assures (at the risk of having legal and economic liability) that they will not disclose any sensitive information regarding the transaction without prior approval.
Salient Features of Confidentiality agreements
- One thing to remember when drafting confidentiality agreements Is the definition of confidentiality. Therefore a broad classification of what forms of disclosure can often be considered as falling under the non – disclosure category.
- There can be two types of confidentiality agreements based on whether the agreement binds both parties or only one. A mutual agreement is usually formed when both parties have shared equal or significant stake in the information, whereas if even one party is unaffected or has low risk from disclosure, then only they are bound by the terms of the agreement.
- Exceptions to Confidential information are included in case the involved parties feel certain scenarios or events may be excluded from the confidential information definition.
- Note that there is a subtle difference between Non- disclosure and Non – Use agreements, both of which are a part of NDA’s. Non – disclosure forbids from disclosing trade secrets but has no say over the usage of the trade where as Non – use prevents usage but has no hold over disclosures.
- The term or periods within which the agreement is valid, and also a term where it is void, if any should exist.
How confidentiality agreements work
Although a confidentiality agreement is a surefire solution, confidentiality agreements do ensure some amount of contractual obligation by a disclosing party which may be enforced or pursued in a civil action either through the Court system or binding arbitration. Indeed, in case of breach of terms of agreement or any other violation the agreement stands as proof and required action can be taken against the violator. Actions can be in form of injunctive relief (imposed restrictions or prohibition from certain actions), repayment of the amount lost by the organization affected by the disclosure and other remedies.
A confidentiality agreement is always recommended to make sure that your business retains its position & advantage while ensuring against disclosure of sensitive information in the market which might affect your enterprise’s performance. With NDA’s and other confidentiality agreements protecting confidential information is a lot easier and does buffer against potential losses in case of unapproved disclosure event. An NDA attorney can help.
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