Non-disclosure agreements can help businesses protect their intellectual property and other critical information. It’s important for businesses to make sure that these agreements are correctly drafted, however. This article looks at the different aspects to pay attention to while drafting non-disclosure agreements.
A non-disclosure agreement, or an NDA, is a legal tool employed by businesses. They help prevent the people they come into contact with from sharing with others information they may gain over the course of their dealings. For example, an entrepreneur may have potential investors sign an NDA to help make sure they don’t leak business secrets that they learn about during their interactions. Business NDAs usually attempt to protect confidential client lists, order histories, technology, process information, marketing strategies, and so on. When NDAs are violated, their enforcers are able to legally require the payment of damages.
Employees and freelancers are often asked to sign NDAs to help ensure that they don’t spill employer secrets when they leave to work for competitors. It isn’t unusual for employers to go even further, and have employees sign non-compete agreements. These agreements keep employees, once they leave, from working for competitors for months.
Are NDAs legally enforceable
Business NDAs are routinely enforced in Oregon. It’s important to remember, however, that these documents need to be correctly drafted if they are to be legally binding. They may be set aside in situations in which the courts find them to be excessively wide in their scope. For instance, if you have an employee sign an NDA that bars them indefinitely from using the knowledge they gain working at your company, the courts may consider the agreement non-binding. An agreement that runs for a specific period of time, on the other hand, would be enforceable.
Businesses need to create NDAs tailored specifically to their requirements, rather than use generic NDAs. Including a list of examples can help make these documents legally valid.
What do you include in an NDA?
NDAs don’t need to be complicated and all-encompassing to be enforceable. Rather, reasonably narrow restrictions tend to come with greater enforceability. Businesses, in general, include many of the following clauses in their NDAs. It would make sense to work with an attorney at business law to draw up a document that is meaningful for your situation.
Naming the parties involved: This is a simple description of the business that aims to protect itself, and the persons or entities that are required to maintain confidentiality.
A definition of the information to be protected: It’s important to carefully think about what specific kinds of information are to be guarded, and to name them.
Exclusions: NDAs often include descriptions of the things considered non-confidential — skills learned while on the job, information that is widely known, and so on.
An end date: Open-ended NDAs that appear to require nondisclosure for an indefinite period of time can be unenforceable. The courts require NDAs to be reasonable in this area, even if reasonableness isn’t a precisely defined concept.
Many businesses possess unique ideas, insights, or technologies that give them an upper hand in their industry. A non-disclosure agreement could help you protect your business in these areas. It’s important, however, to make sure that such an agreement is correctly drafted. Not only does working with a business law attorney make sense, doing so could help you identify potential oversights in your NDAs, as well.