Do you understand when to use a non-disclosure agreement?Non disclosure agreements are legal contracts that require two or more parties to observe confidentiality.
Let's look at some examples.
Imagine that you own a technology company specializing in network installations.
You are bidding on a very lucrative government contract.
You know that several other companies are bidding on the same contract and the competition is going to be strong.
You want your proposal document to be outstanding, so you contract with a professional proposal writer to prepare the document.
You must provide this writer with privileged information so she can write the type of document that will get you an interview.
Since she is an independent contractor, you understand that she has contact with your competitors.
If she reveals the nature of your bid, either accidentally or deliberately, your competitors will use your information to their advantage.
This situation calls for a non disclosure document.
Or, in another situation, let's suppose you represent a small group of multimedia professionals who are working together to create an online game.
You believe that this game will be popular and turn into a money maker for all involved.
Although your group is an informal one, you do not want group members to share the intellectual property with others, or to take the idea and run with it on their own.
This situation calls for a mutually binding non disclosure agreement - one in which all members agree to observe confidentiality.
You will also need language that stipulates that no group member may copy, sell or market the game independently.
Consider yet another situation.
Imagine that you are a small business owner and you are considering selling your business.
To interest potential buyers, you will have to disclosure your confidential business strategies.
You worry that potential buyers might take your confidential information and use it to their own advantage without buying the business.
This is yet another example in which you need a non-disclosure agreement.
There are many others.
A non disclosure agreement can be as simple as a short, one page document in which the other party signs indicating their agreement to safeguard the confidential information.
Alternatively, these confidentiality contracts can be complex, multi-page documents that outline in detail the information to be safeguarded, stipulate the possible exceptions, outline your expectations for how the person will protect the data from loss or theft, and outlines the course of action should the contract be contravened.
Should a dispute arise, a signed non disclosure agreement greatly enhances your chances of a satisfactory settlement, whether in or out of court.