LOVE LAW FIRM shares the six essential components to a non-disclosure agreement or NDA.

A non-disclosure agreement, also called a confidentiality agreement, is a legally binding contract that creates a confidential relationship. A non-mutual agreement typically is used by business owners with new employees who may be privy to sensitive information about the company – including customer lists, pricing, procedures and marketing efforts.

The NDA prevents the employee from sharing confidential information—particularly with the competition. NDAs can be entered into from the moment an employee, or independent contractor, joins your team.

In addition, non-disclosure agreements are frequently used when a business is about to enter into negotiations with other businesses. This permits the parties disclose sensitive and proprietary information without the risk of it being given to competitors or used against their interests. This may include financial information, product technology in development, and marketing results. Often in this situation, the NDA is a mutual non-disclosure agreement (MNDA).

The two main benefits of non-disclosure agreements are confidentiality and protection. There are six essential components to an NDA and the purpose should be clearly stated:

· The parties’ names;

· A definition of what constitutes confidential information;

· Exclusions from confidential treatment (if any);

· A statement of the appropriate uses and the scope of the information to be disclosed;

· The timeframe of the NDA’s applicability; and

· Any other miscellaneous provisions (such as the applicable state law).


NDAs aren’t a panacea and NDAs may not be worthwhile for start-ups trying to raise funding as most venture capitalists will refuse to sign these types of agreements.

But if you have questions about NDAs and keeping your sensitive company information secret, reach out and schedule a call. You’ve worked hard to build your business. Protect it.

Confidentially yours,

Francine E. Love,
LOVE LAW FIRM

Francine E. Love is the Founder & Managing Attorney at LOVE LAW FIRM PLLC which dedicates its practice to serving entrepreneurs, start-ups and small businesses. The opinions expressed are those of the author. This article is for general information purposes and is not intended to be and should not be taken as legal advice.

Francine E. Love
Connect with me
Founder and Managing Attorney at Love Law Firm, PLLC which dedicates its practice to New York business law