What is an NDA?
An NDA is a non-disclosure agreement, also known as a confidentiality agreement. It outlines certain information that is deemed confidential. Confidential means that one party can control what the other party can access and use that confidential information for. The agreement will specifically outline what is confidential and how the receiving party can use or disclose it.
When should I use an NDA?
ANYTIME! You should use an NDA anytime you are sharing proprietary information with another party that is not a part of your business. It usually imposes obligations on the receiving party to protect the information and the receiving party will have to treat it as if it is their own information and not disclose it during the period of the agreement as well as for an extended time after the agreement. Some NDAs last for a year, others can last up to three to five years after, depending on what you want the receiving party to agree to.
Just be aware that receiving party can source information from a public source such as Google or any platforms that have information about businesses. If they can source these things without getting the information from you, it is not protected by the NDA. Typically, the NDA will include that language.
When type of information should I include?
You definitely should include a term limit. For example, if you are selling your business, you do not want everyone accessing your financial data to see if they want to purchase your business and then don’t purchase it. You do not want that information just lingering around. A tool you can use to force that individual to not disclose your information even after the conversation between you and that individual is over is to impose a term limit on how long they would have to keep that information confidential.
At the end of the negotiation period or disclosing period, you should require the receiving party to return all that confidential information to you. Make sure you make the request to get that information back from them.
Another tip here is to label ALL the information that you give to the party as confidential if it is indeed confidential- that way, there is no confusion about what information disclosed is confidential.
What is the most effective way to use an NDA?
One of the most effective ways to use an NDA is when you are hiring or scouting service providers, marketing, influencers, brand ambassadors, or if you have to share your financial data with another business provider or client. If you have confidential information in your business that includes financial information, intellectual property, processes, or trade secrets, this should be included in the NDA if it is necessary for the future agreements you have with the receiving party.
If you require the receiving party to sign an NDA and discover that they are taking your information or stealing your ideas, you can file a complaint or injunction to stop them. An injunction is a court order ordering a party to stop some type of behavior or action. If the receiving party violates the terms and conditions of the NDA, you can take them to court and have the judge review your complaint and grant you and injunction.
The bottom line is you should have an NDA.
Watch the full video here: https://www.youtube.com/watch?v=aCrUDzNLxTs