Why would you risk that million dollar idea or unique trade secret by using a free non-disclosure agreement (NDA) you found on the internet, or worse, not having an NDA in place at all?
A poorly written NDA is just a shield with holes. It’s risky and might have a large scale negative impact on your business. On the other hand, a comprehensive NDA prepared by experts and skillfully drafted and reviewed by a lawyer can support the future profitability of your business. Organizations around the world have used NDA to maintain their trade secrets, avoid copycats and maintain their competitive advantages.
So, What is an NDA?
A non-disclosure agreement protects the critical information that is being shared with other parties or organizations. You might have heard the term a lot with regards to employment/contract work but it can be applied to a variety of situation including sales discussions, partnership negotiations, business proposals and investments.
What should a skillfully drafted NDA cover? At a minimum, an NDA should consider the following:
- Legal names of parties who are covered under the agreement.
- Specifics on what needs to be kept confidential. Example include; intellectual property, marketing information and company financial data.
- Timeframes for the specifics in the agreement.
- Place of the agreement including the legal jurisdiction.
- Consequences of an information breach.
- Province-specific laws as needed.
- Additional situation-specific clauses as needed.
Why should I review my NDA with a lawyer?
Skilled drafting is essential to ensure a legally enforceable contract. If the contract is too broad, it may not provide the protections you intend it to. At a minimum you should have a lawyer review a standard NDA so that clauses can be added that tailor it to your specific situation.
A legal review will also help you avoid minor errors that you might not think of like using trade names instead of legal names or major considerations like jurisdictional implications. A lawyer can also ensure that an NDA is futureproofed by covering third-party/affiliate scenarios, non-competition clauses and residual clauses. In today’s increasingly complex business scenarios NDAs reviewed by legal professionals are essential for ensuring they’ll be enforceable if legal action becomes necessary.
CEO Law is a technology-enabled law firm that is challenging traditional law’s status quo. As part of our document generation solution, you can create customized legal documents (including a non-disclosure agreement) for a fraction of the price that it would typically cost a lawyer to draft them. A list of available documents can be found here.
