Do I need a Non-Disclosure Agreement?

Ever wished you could legally make someone "pinky promise" to keep a secret? Enter the Non-Disclosure Agreement the professional world's way of saying "what happens in this meeting, stays in this meeting" (minus the Vegas references).

A Non-Disclosure Agreement (NDA), also known as a confidentiality agreement, is a legally enforceable contract that should be used when sensitive information is being shared between two or more parties.

Its purpose is to ensure that the party gaining access to sensitive information keeps confidentiality and does not disclose anything to a third party. Situations that may give rise to an NDA include the induction of a new employee or contractor into your organisation or perhaps interacting with external marketing firms or investors.

What's included in an NDA?

A good NDA isn't just a single clause saying "keep quiet" it's a structured document, and there are five key components that every NDA should include.

1. Who's involved. First, the agreement needs to clearly identify all parties involved. This might seem obvious, but it's essential for understanding exactly who has access to the confidential information and who is bound by the obligations in the agreement.

2. What's actually confidential. Next comes the definition of the confidential information itself. A well-drafted NDA will explain the context and purpose of the information without revealing the information itself. For example, an NDA might state that its purpose is to evaluate the ingredients in a cake recipe without actually disclosing the recipe.

3. The rules around using that information. This is the scope of the confidentiality obligation, and it's arguably the heart of the agreement. Typically, it requires whoever receives the confidential information to keep it secret and not use it for their own benefit. After all, the last thing you want is someone walking away with your brilliant idea or your prize-winning cake recipe and turning it into their own success story.

4. Exclusions are used to address situations where it would be unfair for the recipient to keep the information confidential.

5. Terms of the agreement are unique to each one and can provide a variation of different clauses that parties are expected to adhere to, for example, how long the NDA will last or in what jurisdiction disputes will take place in the event one arises.

   
   

What happens if someone breaches the agreement?

Because an NDA is a legally enforceable contract, a breach can be treated like any other breach of contract meaning you may be able to make a claim against the party who broke it.

While it's possible for NDA breaches to end up in litigation, in most cases these disputes can be resolved without ever stepping into a courtroom.

If you believe someone has breached their obligations under an NDA, it's worth getting independent legal advice sooner rather than later. Our solicitors will look at the details of your situation and help you understand your options giving you clear, unbiased advice aimed at the most cost-effective outcome for you.

Need an NDA, or think one's been broken?

If you think you need an NDA drafted for your situation, it's important to get independent legal advice rather than relying on a generic template every business and relationship is different, and your agreement should reflect that.

At CPC Lawyers, we want you to feel confident that our office is a safe, confidential space to discuss your situation. Our Commercial Law team will take the time to understand your circumstances and provide informed, practical advice on the best way forward.