This blog will discuss why you need a non-disclosure agreement if you have a business. A South Carolina business contracts attorney can talk to you and draft a non-disclosure agreement (NDA) tailored to your specific needs. You do not want to use a generic form for this important document.
What a Non-Disclosure Agreement Does
A non-disclosure agreement (NDA) identifies what information needs to get protected by the document and what is not confidential. You might be surprised at the assumptions your employees or others might think are not confidential.
If you clearly identify what information these individuals can use or share, as well as what the NDA protects and prohibits from disclosure, they cannot claim that they did not know. People tend to work better with well-defined boundaries rather than uncertainty.
When a person signs an NDA and later violates it, they are guilty of a breach of contract. The NDA can specify the legal consequences of such actions.
Situations When an NDA Could Protect the Employer/Business Owner
Here are some of the common situations in which you might want to have someone sign an NDA:
- When you hire a new employee, you will want to make sure they understand that your proprietary information is not for them to sell to your competitors and use for their own purposes. Many companies have developed valuable ways of working that are proprietary. You might have software custom-made for your business. Customer lists and details are confidential. Third parties could make improper use of this data, so you will want to protect it with an NDA.
- When employees leave their employment with you, it can be beneficial for them to sign an NDA. Also, when your company develops new information or processes, an updated NDA could be useful to protect the company.
- When you bring on new investors or partners, they will get access to some confidential or proprietary information. Although they might have a legal right to access this data, you will want to nail down what they cannot share with others or use for their own purposes.
- Many products involve financial, technical, or other confidential or proprietary information that should get protected before the technology or product gets sold or licensed to the intended user. An NDA can ensure that the user understands the allowed use of that information as well as which uses are prohibited.
- Selling a company or merging with or acquiring another business involves dealing with multiple third parties. Each of these parties, like agents, brokers, and financial entities, should sign an NDA to protect your company from the unauthorized appropriation of your company’s proprietary or confidential information.
- Even bringing on new clients can subject your company to the risk of misappropriation of your confidential or proprietary information by those clients. Some companies hire “secret shoppers” to pose as clients of their competitors to try to gain access to such valuable information.
This is not an exhaustive list of every circumstance in which you might benefit from the protection of an NDA. You will want to talk with a South Carolina business attorney about your company’s unique risks and develop a strategy to protect the fruits of your hard work with a non-disclosure agreement. Contact our office today for help with your case.