What Is a Non-Disclosure Agreement?An NDA is a legally enforceable contract between the party with confidential information and the party to which that information is disclosed. These contracts protect the interests of businesses by providing legal recourse in the event that employees or past employees reveal sensitive information. If an employee breaks this contract, the employer can sue. If you own a business, it is critical to have an NDA that is enforceable under both Colorado and federal law. These contracts primarily serve the following three purposes:
- To protect sensitive corporate information
- To help inventors keep their patent rights
- To distinguish between confidential information and information that is fine to disclose
Types of Confidential Information Protected by NDAsAn NDA’s content is specific to the company and the situation. It is up to the employer to decide what information should be included and protected, but common types of confidential information include the following:
- Trade secrets
- New product designs
- Secret formulas
- Financial information
- Supplier information
- Training materials
- Marketing strategies
- Sales plans
- Customer information
- Company software
What to Include in an NDAAlthough the question of what to include in an NDA is up to individual employers, there are a few things that all NDAs should include. A professional non-disclosure agreement attorney will make sure the contract contains the following elements:
- A comprehensive list of confidential information. The most important thing for an NDA to outline is a list of the secret and proprietary information that must not be disclosed outside of the workplace.
- Duration of the agreement. It’s essential for employers to include how long an employee or past employee must keep confidential information a secret. Most NDAs specify a duration of one or more years.
- Exceptions to the agreement. Most NDAs include a list of scenarios in which disclosure of confidential information would be permitted.
When to Use an Non-Disclosure AgreementAn NDA is not absolutely necessary for every company. However, it never hurts to have one in place, especially if you’re innovating a service, product or process. At the most basic level, an NDA protects employees and past employees from sharing your day-to-day operations and competitive advantages. NDAs are generally helpful in the following scenarios:
- When you’re performing presentations in front of a venture group for funding
- When you’re in the process of developing a new tool
- When customer and client confidentiality is crucial
- When dealing with medical information and test results
- When you’re trying to keep potentially damaging information under wraps
The Hermele Law Firm: Trusted NDA Lawyers in DenverFor natural born entrepreneurs, their businesses are their children—they want to protect them at all costs. In a time when information moves faster than ever before, establishing the necessary legal protections has never been more important. As a business owner, you already wear many hats; don’t try to be your own legal counsel, too. Much like entrepreneurship, the legal field is much too complex to master in your spare time. The best thing you can do for the longevity of your business is to partner with a trusted business lawyer. At The Hermele Law Firm, we couldn’t be happier to support Denver’s vibrant business community. Whatever your legal business needs, you can depend on us. Feel free to contact us online to set up an appointment or give us a call at (720) 740-0889 today.
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