In the business world, NDAs or non-disclosure agreements are very common. It’s very typical for people early in the transaction to pass NDAs or non-disclosure agreements around and ask each other to sign them. Many people don’t think much about signing them. They just say oh, it’s an NDA. Sign it, but you need to be very careful about what that NDA does.
These are contracts between people and they should typically be legally enforceable. You want to be careful about what you’re agreeing to in a legally enforceable document. There could be some bells and whistles which will vary. The scope of the confidentiality, your obligation to protect the confidentiality in the future, what is confidential and what isn’t, whether the confidentiality provisions run directions or only one direction, how the confidential information can and can’t be used. Basically, there’s a lot of bells and whistles.
Sometimes, you can put yourself in a situation where you’re agreeing to hold confidential information and putting yourself in a very bad business decision. We don’t want to do that, so we want to be very careful when we’re signing these documents that we understand them. Just because there’s a form of non-disclosure agreement doesn’t mean it should be signed. You really need to do an independent analysis. This is a great time to bring in an attorney or somebody with experience with these documents to really help you make sure you do the right thing.
What’s been your experience with non-disclosure agreements? Have you ever signed one and regretted it? What will you do differently in the future? Join us in the comments below.
This posting is intended to be a tool to familiarize readers with some of the issues discussed herein. This is not meant to be a comprehensive discussion and additional details should be discussed with your attorneys, accountants, consultants, bankers and other business planners who can provide advice for your circumstances. This article should not be treated as legal advice to any person or entity. Freeimages.com/Photographer Ed Moon.
About the Author
Shawn McBride — R. Shawn McBride is the Managing Member of The R. Shawn McBride Law Firm, PLLC. Shawn works successful, private business owners in their growth and missions to make a company that stands the test of time. You can email R. Shawn McBride or call 407-517-0064.
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