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Creating a new product or idea specific to your business and defining this as confidential can be crucial for your success. A non-disclosure agreement (NDA), also called as a confidentiality agreement, is a legal contract between two parties to protect confidential information from being disclosed to other parties in business transactions.
An NDA is necessary to protect intellectual property. This will ensure that a manufacturer or a business partner will not pass on details to your competitors.
NDAs can cover trade secrets like a programme or a configuration for a certain machinery or process; technical drawings and designs; mathematical and chemical formulae; business plans; customer information and generated leads.
A basic confidentiality contract lists names of parties involved, the terms and definition of what is confidential within the contract, disclosure period, date when the contract is deemed binding, materials that are no longer kept confidential or exclusions from the agreements, and obligations of both parties, among others.
There are two types of NDA for businesses. A one-way NDA is used when only one business is sharing information and the other party agrees to keep it confidential. A two-way NDA is used when both businesses are sharing trade secrets and want to be sure that neither discloses confidential information.
• When signed, an NDA is a legally binding contract
• Study NDA factors to minimise risk of breaches
• A lawyer draws up an agreement for protection
More on Non-disclosure agreement here.
Source: Cleofi-Krista Capili, Special to Classifieds
The writer is a freelancer