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Nondisclosure agreements protect confidential information

On Behalf of | Jun 25, 2021 | Contracts |

A nondisclosure agreement can be a helpful tool for businesses. They are used to protect the business’s confidential information. Usually, an employee promises to protect the information that they received during the course of their employment.

If the employee later uses that confidential information without the employer’s permission, the business can petition the court to stop the employee from violating the agreement. The business may also be able to sue the employee for damages if the business suffered harm as a result of the disclosure of information.

Types of nondisclosure agreements

There are generally two types of nondisclosure agreements, mutual and one-way. With a mutual nondisclosure agreement, both parties to the agreement disclose confidential information to each other.

One-way nondisclosure agreements are common in employment settings where the business requires the employee to sign a nondisclosure agreement in order to work there.

Elements of a nondisclosure agreement

The nondisclosure agreement must include the definition of confidential information. This sets the boundaries of the agreement without having to disclose the information. It should also list any exclusions from confidential information, meaning that the party who receives this information does not have an obligation to keep it confidential.

It should also include the obligations and duties of the person who receives the information and how long the person must maintain the confidentiality of the information. The time period can be set for a number of years or a certain event.

Nondisclosure agreements ensure that business information remains confidential and in order to be enforceable, they must be drafted correctly. A business attorney can offer advice and answer questions.