Trade secrets and innovative technology are at the heart of many successful companies. Sensitive information like this can even be the key to a startup business getting off the ground.
A non-disclosure agreement (NDA) is a type of legal contract that can be a very useful tool for new and established businesses alike. Essentially, an NDA restricts employees, vendors and even clients from passing on sensitive information to other parties. These are some of the key benefits of utilizing NDAs.
Restrictions can be clarified
Your employees and clients may have a vague idea of what sort of information shouldn’t be shared, but without formal documentation, your company’s expectations may be subject to interpretation. An NDA can and should include the precise information that is restricted.
Facilitation of mutual trust
While it’s important to attract new clients, you also want existing clients to return. Trust is at the heart of any successful business relationship, and an NDA can be the foundation for this reality. By showing that you take confidentiality seriously, your clients will know that they are in safe hands. The same can be said for vendors and others with whom you do business on any level.
Legal recourse for leaks
Ideally, all parties subject to an NDA will adhere to the terms of the agreement. Sadly, this doesn’t always happen. If sensitive information is leaked, then you will have the opportunity to pursue legal recourse per the terms of the NDA. For instance, the document may set out disciplinary procedures for staff in the event that they have shared confidential material. It may also be possible to obtain damages if a client has shared information that has resulted in your business suffering economic losses.
Confidentiality is an important issue and having NDAs in place can address this reality proactively. Implementing valid contracts can be a complex undertaking, so it will benefit you to seek legal guidance to ensure that you take the appropriate steps as you move forward.
