A non-disclosure agreement is an important concept in the world of business law. It’s an agreement between two parties that acknowledges that there might be information disclosed during the course of a business relationship that is confidential in nature. It prevents the parties from disclosing the confidential information to third parties. If you are dealing with proprietary information, business ideas, or financial information, a non-disclosure agreement is definitely something that you should look into. Drafting up a non-disclosure agreement is straightforward if you have a great business lawyer to help out. Below, we will be walking you through the benefits of a non-disclosure agreement so you can decide whether or not it’s the right choice for your business.
1. Defines What Confidential Information Is
An NDA is a great tool for businesses that are looking to legally define what is considered confidential information. It can help you protect things like trade secrets, business plans, and information that can take your business to new heights. Without a non-disclosure agreement, there isn’t anything protecting you from having your confidential information exposed to the world outside of your business relationships.
2. Improves Business Relationships
Another benefit of non-disclosure agreements to keep in mind is that they can actually help to strengthen and improve your business relationships. You get peace of mind knowing that the information you want to keep confidential will stay that way. Everyone knows what information is protected and understands the potential consequences of exposing it, which means everyone is always on the same page from a legal standpoint. It’s easy for misunderstandings between business associates to occur if there isn’t a non-disclosure agreement in place. These misunderstanding can lead to significant legal and financial implications, which is why having an NDA is always a great option.
3. Creates Consequences for Spreading Confidential Information
Once you have a non-disclosure agreement in place, you know that you have certain legal consequences in place if someone decides to breach the contract. Instead of just hoping for the best, you can take legal action against those that share your confidential business information outside of the legal confines of the non-disclosure agreement. If someone takes your million-dollar business idea and tries to make it their own, you can take direct legal action against them. If someone spread your financial information without your consent, you can also take them to court. The NDA is a great way to create actual consequences for sharing confidential information and can buy you peace of mind for all of your business dealings. In today’s business world, information is as good as gold, which is why drafting up a non-disclosure agreement makes so much sense.
If you are interested in creating a non-disclosure agreement for your business, make sure you hire the right business lawyer to handle drafting the legal documents. If you don’t create your NDA the right way, it won’t be legally enforceable. You can always reach out to Derryberry & Associates LLP for any questions related to non-disclosure agreements.