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Non Disclosures |
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A nondisclosure agreement (NDA or a confidentiality agreement) is a contract in
which the parties promise to protect the confidentiality of secret information
that is disclosed during employment or another type of business
transaction. If you make a nondisclosure agreement with someone who uses
your secret without authorization, you can request a court to stop the violator
from making any further disclosures and you can sue for damages. The use of
nondisclosure agreements has become almost ubiquitous in the high-tech field,
particularly for Internet and computer companies. |
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Protect Trade Secrets |
You can use a nondisclosure agreement to protect any type of trade secret --
that is, any information that is not generally known and gives your business a
competitive advantage in the marketplace. For example, using a nondisclosure
agreement, you can prohibit someone from disclosing a secret invention design,
an idea for a new website or confidential material contained in a copyrighted
software program.
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Creates a Confidential Relationship |
The real purpose of NDAs is to create a confidential relationship between a
person who has a trade secret and the person to whom the secret is disclosed.
People who have such a confidential relationship are legally bound to keep the
information a secret. A confidential relationship can also be created through an
oral agreement or can be implied from the conduct of the parties, but few
people rely on such informal arrangements because they are always more
difficult to prove than a relationship based on a written agreement.
NDAs are often categorized as either "mutual" or "one-way."
A mutual NDA is one in which both parties are exchanging confidential
information -- for example, you provide secret information for a company to
evaluate and they provide you with secret information about their marketing
strategy. A one-way agreement is used when only one party is making a
disclosure -- for example, when you explain your secret to a contractor or
investor. |
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Elements of a Non Disclosure Agreement |
A company may want you to sign its nondisclosure agreement or modify your own.
Generally, it does not matter who furnishes the nondisclosure agreement so long
as it contains the basic elements to limit disclosure. There are five important
elements in a nondisclosure agreement:
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definition of confidential information
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exclusions from confidential information
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obligations of receiving party
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time periods
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miscellaneous provisions
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