If you have trade secrets, you can use a non-disclosure agreement to keep them safe. By signing a non-disclosure agreement (NDA), anyone with access to valuable business information, such as employees, third-party contractors, or potential investors, is legally bound to maintain confidentiality.
However, a non-disclosure agreement is only effective when done right. Otherwise, it may not serve its intended purpose, and your business may suffer irreparable losses if confidential information lands in the wrong hands. Here is what you should include in a non-disclosure agreement:
The definition of the particular trade secret
Do not be ambiguous about what the NDA seeks to keep confidential. Your agreement should aptly detail the confidential information. The more particular you are with the details, the better. Failure to state what exactly the NDA covers may make it too broad and unenforceable.
The obligations of the party receiving confidential information
Your NDA should explicitly state that the signing party should take additional reasonable steps to keep the information confidential or prevent unauthorized disclosure.
The timelines involved
How long is your NDA binding to the receiving party? If you want the receiving party to keep your trade secrets confidential forever, it’s better to include that in your agreement rather than leave it to assumptions.
Other crucial provisions
A comprehensive NDA should also cover details like the state laws that apply to the agreement and how disputes will be resolved. Having such provisions will make it easier to address issues regarding the NDA.
Do not leave anything out
When coming up with a non-disclosure agreement, it is crucial to ensure that you do not have any loose ends that could expose your business to losses. Your trade secrets are among your most significant assets, and you should go all the way in protecting them.
Equally, you should be aware of the steps to take to protect your business if the signing party breaches the non-disclosure agreement.