Three Questions Every Entrepreneur Should Ask about Non-Disclosure Agreements
As a new business owner, it is important to understand the concept of non-disclosure agreements and protecting the integrity of your company's confidential concepts and information. Whether you're looking for a business loan, a new partner or an investor, you'll have to disclose some vital information about your company's concepts. If you want to ensure that the information you provide isn't disclosed to anyone else, a non-disclosure agreement can do just that. These agreements are legally binding contracts that prevent people from sharing information that could jeopardize the integrity of your new product ideas. Here are a few common questions people have about non-disclosure agreements.
Do People Have to Sign the Non-Disclosure Agreement?
If you're hiring people to work in your research and development or other vital business departments and you want to protect the integrity of that information, you may be able to require the contract as a condition of employment. You'll want to talk with a commercial employment attorney about this, though, to determine how to legally approach this during your hiring phase.
For investment and partnership prospects, the individual you're approaching isn't required to sign a non-disclosure. If he or she refuses to sign, the best thing you can do is move on and work with someone who is willing to sign it. Someone who refuses to sign a non-disclosure may not be trustworthy in the long run.
Do I Need an Attorney to Create a Non-Disclosure Agreement?
If you're creating a non-disclosure agreement, it's important that you ensure that it is legally binding and accurate. Any inaccuracies in the terminology can invalidate the contract. Work with a corporate attorney who can help you draft the agreement so that it addresses your primary concerns clearly.
What Constitutes a Non-Disclosure Agreement Violation?
A non-disclosure agreement violation happens when one party who has signed a non-disclosure agreement discloses information without the authorization of the other party. Since these contracts are intended to protect confidential or classified information, this can be a serious concern.
In most non-disclosure agreements, there are clear details about what can and cannot be done with confidential information, including who it can be disclosed to, how it should be disclosed and what the consequences are for violation. A violation of one of these agreements can result in litigation. Some of the things that could constitute violations include
- Discussion of new designs with family members.
- Sharing pictures or plans with others.
- Discussing information about the company with the press.
With the help of a commercial attorney and a detailed non-disclosure agreement, you can launch your new business with the confidence that your information is protected. Talk to a professional like FactorLaw for more information.