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Understanding nondisclosure agreements

On Behalf of | Sep 13, 2023 | Business And Commercial Law, Business Organizations |

Business owners may be interested in having their employees or business partners sign a nondisclosure agreement (NDA), which prevents them from disclosing confidential information to third parties. There are several important elements to include in an NDA.

NDA elements

An NDA should include the date it is effective, name the parties to the agreement, and include a definition of confidential information. It should clearly state that the party who receives the confidential information is obligated not to share it with a third party, how long that requirement is in effect, and if possible, how to return the confidential information or destroy it when the NDA ends.

It should also list any exceptions to the NDA and what the consequences are for breaching the NDA. These may include legal action, injunctive relief and damages.


There are several situations that can cause a dispute. The most common is when the person who is bound by the NDA discloses confidential information and violates the agreement.

The parties may disagree over what information is confidential, when the requirement to keep the confidentiality ends, and whether the NDA is enforceable. If the NDA was not updated when the business relationship changed, the person who is bound by the NDA may argue that it is no longer applicable, for example.

There can also be disputes over unclear language in the NDA because the parties can interpret its terms differently. It’s important that the NDA is drafted correctly to avoid these disputes and others.

There is assistance available for business owners who need help.