What are Confidentiality Agreements?
Confidentiality agreements, also called non-disclosure agreements or NDA’s, are binding contracts whereby a person or business agrees to treat certain information as a trade secret and cannot disclose that information absent proper authorization. An NDA can protect your intellectual property and trade secrets from getting into the wrong hands. Confidentiality agreements should be used anytime you disclose sensitive or private information that you do not want released to a third party.
Why Have a Confidentiality Agreement for a Business?
Confidentiality agreements protect your business against proprietary information, intellectual property or trade secrets from being used by another. It is advisable to have this agreement in writing before sharing any information. This allows both parties to understand their rights and responsibilities.
These agreements generally fall into one of two categories: unilateral and mutual. Unilateral confidentiality agreements requires one party to not disclose information to another. This is the most common. Mutual confidentiality agreements require both parties to not share the other party’s information with another. While less common, this type of agreement is used when two businesses agree to share information with one another.
In the event such an agreement is breached, the aggrieved party can sue the breaching party in court.
Common items that form a confidentiality agreements include the definition of what is and is not confidential and the time period for which the agreement applies, along with severability, integration, and waiver clauses.
When to Use a Confidentiality or Non-Disclosure Agreement
An NDA creates a confidential relationship between the person with the trade secret and the person to whom the trade secret is being disclosed. It creates a legally enforceable and binding contract between the parties. Situations in which an NDA is useful include:
- An entrepreneur wishing to protect their business plan
- A business owner who has a trade secret he or she does not want employees discussing with others.
- An employee leaving a company and the owner desiring to not have that employee disclosing any confidential information.
Columbus and Delaware, Ohio Small Business Attorney
If you wish to have a confidentiality agreement or non-disclosure agreement created to protect your small business, contact Johnson Legal, LLC and speak with an experienced small business attorney. Attorney David Johnson of Johnson Legal, LLC will discuss your business and assist you in creating a confidentiality agreement to protect it. Call (614) 987-0192 or send an email to schedule a consultation regarding your business.