Naperville Business Law Attorney Talks About the Usefulness of Non-Disclosure Agreements
In my practice as a business law attorney, I am often asked about various types of agreements and contracts, including employment contracts, non-compete agreements, and confidentiality agreements. There has always been some measure of confusion in the general public about agreements such as these, but confidentiality agreements can be especially complicated. A confidentiality agreement may also be called a non-disclosure agreement, NDA, confidential disclosure agreement, proprietary information agreement, or a secrecy agreement. When used properly, an NDA can be a valuable tool for business owners.
An Unfair Reputation for a Valuable Legal Tool
Non-disclosure agreements seem to be a target for criticism in the media and among those who do not really understand the importance of the agreements. Many people assume that if information is being hidden or protected, there must be a nefarious reason or an ulterior motive. This is simply not the case.
An NDA is a legal contract that can exist between two or more parties that guides how confidential information should be kept private. For example, if two parties wish to discuss sensitive material without the threat of that information leaking to a third party, they can use an NDA to establish confidentiality rules. Doctor-patient confidentiality, attorney-client privilege, and bank-customer confidentiality are forms of non-disclosure agreements. While often receiving bad press, an NDA by no means indicates that any illegal or unethical behavior is being protected.
Scenarios in Which an NDA May Be Useful
Some business owners and entrepreneurs use NDAs to protect sensitive information during the sale or licensing of a product. If someone has created a new technology or product and wishes to prevent a purchaser from using the information about the product against the creator, he or she can ask the potential buyer to sign a non-disclosure agreement about the information he or she learned during the transaction. NDAs can prevent unscrupulous individuals from using the results of your hard work as leverage in other negotiations.
NDAs can also be useful when a business owner wants to ensure that employees will not share private information about contractor and manufacturing agreements, copyrighted processes, or clients. For example, if your client has access to personal or financial details about your clients, having your employees sign an NDA prevents them from sharing this information and making you potentially liable. Business owners who are considering selling their business to another individual or party often use NDAs to protect the information potential investors or buyers will learn about their company. Unfortunately, it can sometimes be difficult to know when a potential buyer is serious and when they are only “fishing” for information. A non-disclosure agreement protects your business’s financial and legal interests.
Speak to a DuPage County Contracts Attorney Today
If you are a business owner and have further questions regarding non-disclosure agreements or any other business-related legal matter, contact the Gierach Law Firm today. Call 630-756-1160 to get the answers you need or to schedule an initial consultation with one of our skilled Naperville business law attorneys. We are committed to helping you protect yourself and your business interests.