Top Scenarios Companies Should Have An NDA To Protect Their Assets
Confidentiality is something that everyone wants, especially when it comes to business. We want to keep our secrets, keep our interests, and keep our business to ourselves. That being said, there are times in which we must disclose to further our business and make progress. Most companies are built around a secret or at least a very particular set of circumstances that make them unique and different from other businesses, and it is this individuality that a non-disclosure agreement is meant to protect. There are some circumstances in which using this type of contract is beneficial and knowing what they can be incredibly helpful to the savvy business person.
A great example of a person that you might need to have signed a non-disclosure agreement is a new employee. When you make a business or work to develop one, you are most certainly going to need employees. Depending on what type of business you have, what you do, and what you want your employees to know, you may want to formulate a non-disclosure agreement for all employees. You want to take the time to think about what you want in your agreement. Your agreement needs to be tailored to the person that is signing it and to the particular relationship between the person that is presenting the agreement and the person that is signing it.
When having an employee signing a non-disclosure agreement, it is because they are likely to come in contact with sensitive information. You want to make sure you clearly outline what they can and cannot share and what they must keep to themselves. It is essential to have a lawyer present that can explain the agreement to the employee so that they know exactly what they are signing. It is common practice in companies such as SpaceX or Microsoft to have employees sign NDA agreement, especially since many companies try to poach the employees of their competitors.
Investors and Clients
Another instance in which you may want to have a non-disclosure agreement is when you are either looking for investors or looking to talk with a new client. You want to make sure you let them divulge enough information so that they know what they are getting into but also that they know they cannot spread or share the information with other people. This will help you to create a meaningful relationship without letting too much information go and without letting too many of your secrets out.
When creating a non-disclosure agreement for a client or investor, you may want to protect things like accounting books, other client lists, and more. You want to make sure you are taking the time to protect what you need to protect while giving possible clients a look at your business that will make them want to be a part of it.
Your company’s intellectual property and trade secrets are extremely important to protect. Utilizing an NDA when providing access to contractors, employees or clients will be necessary, especially if you are working with software.
Although NDA’s are in place to protect your assets, sometimes confidentiality agreement may be breached. This breach can lead to liability and damage to your company. Your next steps during an NDA breach would be to alert legal counsel to assist in implementing a Preliminary Injunction or Temporary Restraining Orders to minimize damages.
You want to take the time to be very clear about what you are protecting. Things like intellectual property, ideas, account books, and any secrets that make your business unique are all going to need to be protected. Making sure you take the time to create a substantial agreement is the difference between being able to legally defend and protect your confidentiality and an agreement that may fall apart in a court.
For more on NDA and Confidentiality agreements, you can find our online fixed priced agreements by clicking here.