Non-disclosure agreement is a confidential document that is a legal agreement between two parties that specifies confidential material, data, information that parties wish to share with each other for some reason, and also restricts access to or by third parties. Non-disclosure contract is an agreement whereby the parties agree not to disclose the information to which the agreement refers. This creates a confidential relationship between the parties. It is often signed when two businesses, persons or other bodies (partnership, community, etc.) consider doing business together. This establishes a confidential arrangement between the parties who agree not to "disclose" the shared information through this contract, hence the term "Non-disclosure agreement".
Requirement of Non-Disclosure Agreement
A non-disclosure agreement is made to protect that data which is not generally known and which is of some importance to the owner of the information.
For instance, certain companies or institutes operating on their projects are restricted to disclose their research studies to anyone other than the individuals involved; a non-disclosure agreement is used here.
Another example would be specific recipes used by a restaurant company; the employees are under non-disclosure agreement to not to reveal their secret contents and procedures. In few cases, where legal disputes are settled, here both parties often sign a non-disclosure settling agreement.
Types of Non-Disclosure Agreement
A non-disclosure agreement may be classified as unilateral, bilateral or multilateral. Unilateral would include two parties, the holder of the data and the one who agrees not to disclose the information. Bilateral is the category in which two parties may share information, which bounds them to not to disclose it. As the name suggests, Multilateral involves multiple parties, where one or more share information and one or multiple parties agree not to reveal the data.
Some Highlights of a Non-Disclosure Agreement
A Non-Disclosure Agreement may or may not include a provision to protect the recipient of the confidential information so that if they legally obtain the confidential information through other means, they would not be required to keep the information confidential. Another dimension is that they cannot be enforced if the actions involved are criminal offenses, if the contract is for illegal activities such as gambling and drug smuggling, no valid implementation of a non-disclosure agreement from the law will be applicable in such cases.
Advantages of Non-Disclosure Agreement
Information Protection: A non-disclosure agreement provides protection of information by allowing data which can and cannot be disclosed to others that each party's responsibilities are in regard to confidentiality, and how it shall be dealt with.
A well-formulated non-disclosure agreement specifies the repercussions for those who violate the NDA and are likely to include a large monetary fine.
Secure Your Intellectual Property by Non-Disclosure Agreement
You must be worried about how to keep your unique ideas away from the grasp of your company’s accomplices, hoping it would not end up being the way to their prosperity. The best way to use your innovative property is to share with the people who can make you profit as a result. The non-disclosure agreement referred as Confidentiality Agreement. These are the kinds of basic non-disclosure agreements, which allow you to share the intellectual property with others.
Effectiveness of Non-Disclosure Agreement
Many organizations and business individuals depend on Non-Disclosure Agreement to safe-guard their unique ideas, intellectual property, financial information, unpublished patent applications, forms or other materials. For example, assume that you are building up a model of a new item that will make you a little fortunate. You have to connect with an advisor to prompt you one particular part before you can finish the model in any case. You may ask the advisor to sign your non-disclosure agreement to ensure that he or she does not reveal your secret data to your rivalry companies. As we all know these are legal contracts and are important. If there is any disagreement, you may ask the court to resolve the dispute and make the right decision.
Use of Non-Disclosure Agreement
Suppose that you have a creative company that specializes in network construction. You are bidding on an extremely lucrative government contract. You are also aware that some other organizations are also providing the similar services and thus increasing the competition. You need your proposition document to be outstanding, so you contract with a writer of expert proposals in setting up your document.
You are going to give this writer the essential information he needs so that he can create the right kind of document for you. As he is a self-employed contractor, he can contact with your opposite parties as well. In this event, he might reveal the idea of your offer, either coincidentally or intentionally, your rivals will utilize your data for their benefit. To save from this loss, the need of non-disclosure agreement comes.