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Essentials of non-disclosure agreement or confidentiality agreement |
| Date Added: September 22, 2011 10:52:13 AM |
| Author: Robert Mark |
| Category: Business: Management |
| Confidentiality or Non-Disclosure Agreement Confidentiality or Non-Disclosure Agreement is a best tool to protect your business secrets. This article provides information on essentials of confidential agreement. Confidentiality or Non-Disclosure Agreement A legal agreement between two or more parties that is used to signify that a confidential relationship exists between the parties. A confidentiality agreement is used in strategic meetings where various parties become privy to sensitive corporate information, which should not be made available to the general public or to various competitors. It is also known as a ""non-disclosure agreement (NDA)"". Purpose of Confidentiality Agreement Employers benefit from confidentiality agreements because they keep other parties from sharing proprietary knowledge that is confidential and proprietary to the company with competitors. This can cover: • trade secrets - eg a formula, programme or process • technical drawings and designs • mathematical and chemical formulae • business plans • customer and prospect lists Advantages of Written Agreement A written agreement has a number of advantages: • it offers clearly defined protection and precise wording, such as definitions of “public domain”, the confidentiality time period and contracting parties; • it is more practical; • it is useful for negligent and inadvertent, rather than purely intentional disclosure; • it can be enforced against the recipient’s employees; • it can impose ancillary obligations such as the return of documents. Types of Confidentiality Agreement Confidentiality agreements can be one-way or two-way agreements: • A one-way confidentiality agreement is where only one party discloses confidential information to the other (also known as Unilateral Confidentiality Agreement); and • A two-way confidentiality agreement is where all parties disclose confidential information to each other (also known as Mutual Confidentiality Agreement). Functions of Confidentiality Agreements It performs two functions: Firstly they protect sensitive information from being disclosed to anyone else. One or more participants in the agreement promise not to disclose the information received from the other party. If the information is disclosed to another individual or company, the injured party has cause to claim a breach of contract and can take the other party to court to seek damages. Secondly the use of a confidentiality agreement prevents the loss of valuable patent rights. In law the public disclosure of an invention can be deemed as a forfeiture of patent rights surrounding that idea or invention. A confidentiality agreement can prevent valuable patent rights being lost unintentionally. Different situations of Confidentiality Agreement Here are some typical situations where a Confidentiality Agreement is often used: • An invention or business idea will be presented to a potential partner, investor, or distributor • Financial, marketing, and other information will be shared with a prospective buyer of your business or co-venturer • A new product or technology will be shown to a prospective buyer or licensee • A company or individual will be providing you with services and will have access to some sensitive information in providing those services • Employees will have access to confidential and proprietary information of your business in the course of their job A confidentiality agreement is also used in other circumstances including: • management and senior level job interviews during which company confidential information is discussed, • consultant or contractor contract and assignment discussions and products resulting from contractual work, • vendor discussions that involve products, parts, and other proprietary information sharing, and • Situations involving stock or company purchase, due diligence, or any interaction during which confidential information is shared. What if the Party itself publishes the Information? Publication by the any party effectively waives the right to confidentiality. Tenure of Confidentiality Agreement The agreement could last indefinitely, and this may be necessary for particularly sensitive or valuable information. However, it is important not to burden the recipient unnecessarily as an unfair term may be struck out by the Courts. The agreement should also include a deadline date by which all materials must be either destroyed or returned to the donor. Non Disclosure Confidentiality Agreement-Non Disclosure Agreement-Tenancy Agreement Australia-Tenancy Agreements |
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