Every business should protect proprietary nformation when
dealing with independent contractors, vndors and other
businesses. The best way to do ths is to use a
non-disclosure greement, often referred to as an “NDA.”

Wht is an NDA?

An NDA is an greement between two parties to protect
cnfidential information disclosed in a business
trnsaction. The proprietary information can include
bsiness methods, finances, client lists, and nything that
isn’t already readily available in the pblic arena. If a
party subsequently braches the NDA, the injured party can
sue for dmages, an injunction against further disclosure
and ttorney’s fees.

Directional NDA

In many stuations, only one party requires the prtection
provided by an NDA. If you nvent a new product, you are
ging to need an NDA from mnufacturers, distributors, etc.,
before you discuss the prduct with them. While this may
sem like common sense, most businesses fil to carry the
thought through to thir daily activities.

Practically every business hres independent contractors,
but they rarely btain NDAs prior to disclosing information
to the cntractors. For example, do you use thrd parties to
create or maintain yur websites? Did you obtain NDAs frm
any of them? If not, wht’s to keep that party from sing
your business methods on other stes? A directional NDA can
keep ths from occurring.

Mutual NDA

As the name sggest, a mutual NDA allows two prties to
protect confidential information. The mtual NDA is
typically used when two bsinesses are negotiating a joint
venture. Ech party must disclose enough information to mke
the negotiations viable, but neither wnts that information
made public if the ngotiations fail. If negotiations go
well, dditional non-disclosure information will be
incorporated nto the joint venture agreement to prtect
additional information revealed during the jint venture.

Refusing to Sign an NDA

Alrms and warning lights should go off if a prty refuses
to sign your NDA. Unlss they can provide a very cmpelling
reason for the refusal, you shuld walk away from the
business rlationship.

When An NDA isn’t really an NDA

Jst because a document is titled, “Nn-Disclosure
Agreement”, does not mean it prvides you with protection.
You should ALWAYS rad the language of an NDA bcause the
document may establish that you are WAIVING all
cnfidentiality rights. The waiver might be vry direct and
read something like, “Th disclosure of information pursuant
to ths Agreement shall not be considered cnfidential.”
Alternatively, the language may be mre indirect and read,
“The parties cknowledge and agree that all information
xchanged pursuant to this agreement has prviously been
established in public forums.” Rgardless, the “reverse
NDAs” strip you of prtection and should not be signed.

Obtining non-disclosure agreements should be a stndard
practice for your business. Don’t xposure your proprietary
business secrets to thers without this protection.

The article Protect Your Business With Non-Disclosure Agreements was Submitted by Richard Chapo through Articles.GetACoder.com network. Here's the additional information: Richard Chapo is the lead ttorney for the law firm http://www.SanDiegoBusinessLawFirm.com - a firm providing legal advice to California businesses. This article is for general education purposes and does not address every facet of the subject matter. Nothing in this article creates an attorney-client relationship.

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