What is a non disclosure agreement?
When sharing important information relating to your business with other parties, you may assume that the details you disclose won’t be shared elsewhere. However, in reality there’s a risk those you share your company information with could pass these details onto additional parties. Not only can this be a frustrating breach of your trust, depending on the information in question, it could be damaging to your business too.
Thankfully, there are legal protections that can be put in place such as non disclosure agreements. If you’re wondering ‘what is non disclosure?’ read on to learn more about this valuable type of agreement.
Non disclosure agreement meaning:
An NDA is a legal contract. It sets out how you share information or ideas in confidence. If you need to share important information with another party, using a non-disclosure agreement can help to discourage them from sharing the information elsewhere.
Non disclosure agreements can also be referred to as privacy agreements, secrecy agreements, confidentiality agreements and most commonly, NDAs.
You may decide an NDA is required when speaking to the following:
- Financial advisors
- Insurance brokers
- Business coaches
Does a non disclosure cost money?
Yes. NDAs usually cost between £200 to £800 but costs can vary depending on where you get the agreement from and the terms outlined within it.
To ensure your NDA is fit-for-purpose, it’s wise to seek professional advice and have the agreement drawn up by a legal expert.
What can a non disclosure agreement include?
When laying out a non disclosure agreement, you’re likely to have a lot of flexibility in terms of what it can include. You may choose to only protect information that’s recorded and marked ‘confidential’. Alternatively, you may wish to also protect information and ideas discussed in meetings or presentations.
NDAs are often ideal for those wishing to seek advice and guidance on a new business venture while ensuring their ideas are protected.
It’s important that the NDA goes into as much detail as possible to minimise the risk of confusion. By making the terms clear, it becomes easier to prevent your private information being shared by others.
Your NDA should also include the length of time the restrictions will last. NDAs tend to last 3 to 5 years but you can discuss the exact duration with the legal professionals in charge of creating your agreement.
If at a later date you decide you’d like more protection, it’s usually possible to widen the NDA’s permitted purpose. However, it’s not possible to narrow the restrictions at a later date.
Although a non disclosure agreement can offer you lots of flexibility, it’s wise to be realistic and consider that those you speak to may need to share your information with employees or their own advisors.
What are the different types of non disclosure agreement?
There are different types of non disclosure agreement to consider.
The two main types include one way agreements or mutual agreements. If you’re the only party disclosing information, a one way NDA is appropriate. If both parties are sharing information, a mutual agreement will be more suitable.
If you live in a different country from the other party, the NDA will need to state which law governs the agreement. After all, different countries have different legal systems in place. The NDA will also need to state which courts the agreement can be enforced within. It’s crucial that courts in both of the relevant countries are given jurisdiction.
If your company is growing or you’re looking to work with external teams, a non-disclosure agreement may be worth investigating as an option to protect your data.