In this video, Ryan Lisk from Hybrid Legal explains what a non-disclosure agreement is and why NDAs are so important. Also known as confidentiality agreements, Ryan discusses some of the common misconceptions around NDA’s and gives practical advice on how to manage NDAs in your business.
An NDA stands for a non-disclosure agreement which is a contract between parties where they all agree that they will not disclose information that they believe is confidential information, the sort of information that you want to keep private and that you don’t want anybody else to know unless certain conditions are fulfilled.
NDAs are really important when it comes to guarding secrets or private information that, if leaked, could cause damage to the business or the individual that the confidentiality agreement or non-disclosure agreement is set up to protect. It’s really important that you take NDAs seriously.
Do you always need an NDA?
It’s all down to the subject of that agreement and just how sensitive it would be if that information was to leak. Some businesses don’t actually need a non-disclosure agreement because they’ve already covered off confidentiality in their terms and conditions of business, which is often, more than enough to cover the type of information that they’re disclosing during the relationship with the individual or the organisation that they have that contract in place with.
So that’s one example. Another would be the fact that a lot of businesses that use NDAs, particularly those businesses that draft their own, they often get lost in the details.
They don’t accurately and clearly define what is meant by confidential information. That’s one of the most fundamental parts of the non-disclosure agreement, really clearly defining what you mean and what’s intended with confidential information and the way that it should be handled and having a sensible expiry and duration of that confidential information.
Managing your NDAs
Lastly, the other key area where we see a lot of businesses struggle is actually having an accurate central register of the non-disclosure agreements that they’ve issued. So actually keeping a log of it because once you’ve signed it. It’s quite easy to forget a year later that you’ve actually signed up to that agreement. And if you’re binding the business and not yourself as the individual, the risk there is if people change jobs and leave, it’s making sure that those that are staying with the business are aware of the obligations that the company is obliged to fulfil for a certain period of time.
All of that can be solved by having a nice central register. A record of the NDAs that you’ve signed up to, who it’s between and the expiry and making sure everyone is aware of that.
Beware of non-disclosure agreement templates
Making sure your NDA is accurate is also key. Templates will go really only so far. A template will require the user i.e you, to actually fill out the information accurately. And that’s where some businesses will just be quite blasé. They’ll just type in fairly generic information that they would regard as confidential and not really think about what happens once it’s signed. Several questions then arise:
- Do you actually know what you’ve committed yourself to?
- Does the rest of the business know and understand the implications if you have conversations or if you do certain things around this confidential information?
- How are you communicating that to your team so they’re on board with it?
Those are some examples, of where it can go wrong by doing it yourself. So having a well-drafted non-disclosure agreement in place can really benefit all of the parties concerned.
NDAs can help build confidence and trust
It’s often the very start of a relationship where you sign up to a non-disclosure agreement just to build trust and confidence with a new party or a new person that you’ve not done business with before. And the same for them. It gives them the confidence to open up about their business or their particular circumstances with the ease of knowing that that contract is there to protect them.
In the event that that information is leaked. And in a world today where technology and the way that we can share private information is so vast, NDAs have really got a key place now to protect and safeguard our private, sensitive information.
When used properly and a big caveat there: when used properly, NDAs can be a very powerful tool and can give you confidence.
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