Non Disclosure Agreement: What Type Of NDA Do You Need?

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Non Disclosure Agreement: What Type Of NDA Do You Need?When someone wants to protect confidential information, it’s common to use a written non disclosure agreement (NDA) that’s properly signed.

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There are two common kinds of NDAs — (1) unilateral and (2) mutual.

1. Unilateral Non Disclosure Agreement

With a unilateral NDA, one party is agreeing not to disclose the other party’s confidential or proprietary information to third parties or to the public in general. It’s called “unilateral” because the agreement is one-sided with only one party making the promises to protect data.

Related Article: Confidentiality Agreements – How To Use Them In Your Online Business

2. Mutual NDA

Naturally, a mutual non-disclosure agreement has both parties agreeing not to disclose each other’s confidential or proprietary information to third parties or the public.

Which Nondisclosure Agreement Should You Use?

As a practical matter, it’s easier to get the other party to sign a mutual NDA instead of insisting on a unilateral one in your favor. However, where the other party is at a distinct disadvantage or where it’s clear that you will not be receiving proprietary or confidential information from that party, it’s possible to get a unilateral NDA signed in your favor.

Is An NDA Part Of A Contract Or Its Own Independent Agreement?

non-disclosure-agreement

It can be either an independent agreement or part of a broader contract covering other issues depending upon the circumstances.

In many instances, the NDA is a standalone contract signed by the parties. However, it’s also common to have non-disclosure clauses or provisions as part of a larger agreement (e.g. a joint venture agreement).

Related Article: Nondisclosure Agreement – Can You Use An NDA To Gag Employees?

Where Can Your Business Get The NDAs That You Need?

An experienced business contracts lawyer can prepare both unilateral and mutual NDAs.

Related Article: Business Contract Template – The Pros And Cons

The attorney can also add such confidentiality provisions to other contracts where it’s important to protect data from disclosure.

To speak with Business Attorney Mike Young about NDAs or other contract legal issues, set up a phone consultation today.

Nondisclosure Agreement: Can You Use An NDA To Gag Employees?

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nondisclosure agreement ndaAs an employer, you should weigh the pros and cons of using a nondisclosure agreement to keep your employees from revealing to others information that you do not want known outside of your company.

Common Nondisclosure Agreement Uses In Employment

NDAs are frequently used by employers to protect proprietary data, such as trade secrets, business plans, etc. Nondisclosure provisions are commonly part of a written employment agreement rather than a separate contract.

In addition, nondisclosure contracts are a tool used to keep a current or former employee quiet as part of a settlement of legal or other claims that would damage the company if made known to others (e.g. sexual harassment).

Related Article: Non-Compete Agreement – How To Make It Legally Binding

NDA Benefits

Here are three common benefits of using nondisclosure agreements:

(1) Protection of proprietary data you do not want competitors to know about;

(2) Reputation management; and

(3) Minimizing financial loss through settlement instead of risking litigation.

NDA Weaknesses

From an employer’s perspective, a nondisclosure agreement is not bulletproof because there are some things that cannot be kept confidential even if an employee agrees to sign the contract.

Related Article: Can You Verbally Modify A Written Employment Agreement?

For example, if a trade secret protects information that risks public health or safety (e.g. defective device sold that injures customers, company environmental contamination of water supply, etc.), the employee cannot be forced to remain silent to protect the company.

Similarly, an NDA cannot be used to prevent a current or former employee from cooperating with law enforcement with regard to a criminal investigation.

Non-disparagement Agreement

Despite its deficiencies, a non-disclosure agreement generally helps protect a company’s interests. In addition, to reinforce confidentiality, it’s also a good idea to have a non-disparagement agreement with current employees and former employees as part of any settlement. Typically, the non-disparagement provisions are part of the employment contract, settlement agreement, or NDA rather than an independent contract between the parties.

Related Article: Does Your Business Lawyer Draft Contracts That Encourage Lawsuits Or Dispute Resolution?

These provisions typically consist of a reciprocal promise between the parties, both employer and employee agreeing not to say bad things about each other to third parties or the public in general. However, an agreement not to disparage has similar weaknesses to an NDA. For example, the employer cannot rely upon it to prevent a former employee from providing law enforcement with information in a criminal investigation that portrays the company in a bad light.

Related Article: How To Use A Non-Disparagement Clause To Protect Your Business

Where Do You Get An NDA?

The best place to get a nondisclosure agreement to use with your employees is from an experienced business contracts lawyer who handles employment-related issues. If you would like Business Attorney Mike Young to prepare one for you or revise an existing NDA, the first step is to set up a confidential telephone consultation with him.

Software Developer Nondisclosure Agreement: 5 Issues to Cover

By | Software Agreements, Software Lawyer | No Comments

software developer nondisclosure agreementIf you’re developing an app, you can benefit from having a signed software developer nondisclosure agreement (NDA) when dealing with clients and competitors.

For example, in a recent lawsuit, a software developer claimed that its rival engaged in misconduct, including breach of a nondisclosure agreement. The jury agreed and awarded almost $44 million.

However, don’t try to put together the contract without the help of an experienced software lawyer if you want the agreement to be enforceable.

Related Article: Software Development Agreement – Who Really Owns The Intellectual Property?

Important Issues to Discuss with Your Software Lawyer

When talking with your software lawyer, here are five issues to consider for your agreement (there will be others too):

  1. Choice of Law. What law will govern the NDA if there’s a dispute?
  2. Jurisdiction. Which courts will have jurisdiction to handle a lawsuit if there’s a breach of the agreement?
  3. Parties. Which parties should sign the contract? For example, if there are subcontractors involved in software development, should they be required to sign nondisclosure agreements too?
  4. Liquidated Damages. Will you include a liquidated damages provision with a sum substantial enough to deter breaches?
  5. Attorneys’ Fees. If there’s a dispute, is each party responsible for his own legal fees or do you want a loser pays provision?

Of course, any NDA is only as good as the person signing it. If you’re dealing with someone dishonest (and why are you?), you should expect there will be a breach of any agreements you reach. In other words, due diligence is key before entrusting anyone with information that needs to be protected by a confidentiality or nondisclosure agreement.

Related Article: Software Contract – How To Pick The Right One

Where can you get a software developer nondisclosure agreement?

If you’re looking for a customized software developer nondisclosure contract or other software agreements to protect you and your business, you may want to have a phone consultation with Dallas Software Lawyer Mike Young.

However, it may make sense for you to invest in our Software Development Legal Protection Package instead to obtain additional levels of protection for your intellectual property.

Non-Disclosure Agreement: How to Protect Confidential Information

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non-disclosure-agreement

Are you using a non-disclosure agreement to protect your confidential information?

What is a non-disclosure agreement?

A nondisclosure agreement (NDA) is a contract between two parties (individuals or businesses) that’s designed to permit sharing of trade secrets and other confidential information without it being disclosed to third parties or to the public in general without the prior express permission of the party sharing the data.

Although commonly referred to as an NDA, a non-disclosure agreement is sometimes labeled with other names, such as “confidentiality agreement.” How the contract is titled is less important than what it contains for purposes of protecting data.

Mutual or unilateral confidentiality agreement?

The agreement can be mutual (reciprocal) or unilateral. Mutual NDAs are frequently used where both parties are sharing confidential information. In contrast, a unilateral NDA is common where only one party is sharing confidential data with the other rather than it being a mutual exchange.

3 important parts of an NDA

Although the terms of your NDA will vary depending upon a variety of factors, here are three of the common issues your confidential agreement should cover.

  1. Confidential Information Defined. Your NDA should include a definition of what constitutes confidential information. Equally important, the NDA ought to make it clear what information is considered nonconfidential. This prevents misunderstandings between the parties and reduces the risk of litigation for breach in the process.
  2. Restrictions on Use. Your non-disclosure agreement should make it clear how the shared confidential data can and cannot be used by the parties to the agreement, including the protection of intellectual property (IP) rights. Can copies be made? Will the confidential information be returned by the recipient or destroyed at a certain point. If destroyed, what type of proof will be required? For example, will the recipient be required to provide an affidavit of destruction?
  3. Remedies for Breach. How will violations of the confidentiality agreement be handled? Will the nonbreaching party be able to go to court to obtain an injunction?

How to get an NDA for your business

If you need a nondisclosure agreement prepared or an existing confidentiality agreement reviewed, the first step is to set up a phone consultation with Internet Lawyer Mike Young.

Confidentiality Agreements: How to Use Them in Your Online Business

By | Business Contracts, Business Lawyer, Internet Lawyer | No Comments

confidentiality agreementsThere are many online activities where it is a good idea to get signed confidentiality agreements in place. These include:

  • outsourcing work to a bookkeeper
  • software development
  • ghost writing
  • negotiating the purchase or sale of an Internet business

You will want to protect your trade secrets and other intellectual property at a minimum.

Related Article – How To Use A Non-Disparagement Clause To Protect Your Business

One of the important things to remember about confidentiality agreements is that they are designed to be a reminder to the parties who sign it. Equally important is to recognize that a dishonest person will sign a confidentiality agreement in a heartbeat without thinking twice about violating it.

In other words, choose who you do business with wisely.

“Three can keep a secret, if two of them are dead.” – Benjamin Franklin

Important Confidentiality Provisions

The scope of your confidentiality agreement can be custom-tailored by your Internet lawyer to meet your business needs.

Related Article: Business Contracts – 5 Mistakes To Avoid As An Entrepreneur

Key issues to include in your agreement are…

1. What information must be kept confidential?
2. What information should not be treated as confidential?
3. Should the relationship between the parties be kept confidential?
4. Who must sign the confidentiality agreement?
5. Should copies of the confidentiality agreement be signed by employees and others who have access to the information?
6. What types of legal and equitable remedies do you want available if the confidentiality agreement is breached?
7. How will your confidential information be handled once your relationship with the other party terminates?

Is there a difference between confidentiality agreements and nondisclosure agreements (NDAs)?

As a practical matter these days, both confidentiality agreement and non-disclosure agreement are used interchangeably to describe the same type of legal document. No matter which way the contract is titled, the purpose remains the same.

If you have business information you need to protect, set up a telephone consultation with Internet Lawyer Mike Young to discuss the creation of a confidentiality agreement that’s right for you.