What is a Non-Disclosure Agreement or an NDA?

A non-disclosure agreement or confidentiality agreement is a type of contract intended to keep a certain company's interests. These are either mutual or non-mutual. They are mostly used in businesses primarily to maintain confidentiality. The parties involved here are the disclosing party and the receiving party. In non-mutual agreements, the receiving party ensures that the disclosing party's confidential information must be kept secret and must do all the possible preventive measures to protect it. They are not also allowed to take advantage of the information that they have been bestowed upon.

How to Create a Binding Non-Disclosure Agreement

how to create a binding non-disclosure agreement

For most entities, consulting a lawyer or attorney is a surefire way of creating an NDA but if you want to cut the finances, you can download sample NDA templates online. There are also various simple NDA templates for you to choose from in PDF formats if you want to be spared from the complexities of making one.

In a recent study, over one-third of American employees are made to sign NDAs which could possibly mean bad news. There are instances where an employee experiences harassment and because of the NDA, he/she will be restricted from making complaints. You can craft a non-disclosure agreement that does not encourage harassment while protecting your company's interests. Here are the tips:

1. Stipulate the Parties Involved

This is the most crucial part of the legal agreement document. You must stipulate clearly the names of the parties involved. For companies with "Inc." or "Co.", do not omit this particular information because it can deem the agreement null and void. For your assurance, you can research their company name to prevent mistakes.

2. State the Kind of Information That Must Be Kept Confidential

This info will be your company's process, client list, and etc. Just like the statistics have stated, you can prevent harassment in your workplace by explicitly stating the information that must be kept confidential. You can also state that anything that involves harassment is not covered by the NDA. Neglecting this crucial information in your agreement form or document might tarnish your company's reputation.

3. State Its Scope

You must include the scope and limitations of your NDA so the receiving party is knowledgeable enough what to disclose and what not to. Think of the possible pertinent information that should remain confidential. Make sure that the receiving party will not be able to find a loophole in the written business agreement to use to their advantage.

4. Specify the Confidentiality Period

Legal NDAs or other kinds of private agreements are not meant to last forever unless you are willing to spend that much for it to last long enough. You must indicate the confidentiality period so the receiving party will not be burdened by the obligation. It's quite unfair on their part as well if they are constantly obligated to maintain confidentiality.

5. Indicate the Penalty in Case of Breach

Whenever the receiving party does not keep their end of the bargain, indicate the repercussions they will face if ever the legal confidentiality agreement is breached. Litigation can be a possible penalty.

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