Business Plans

Many businesses and entrepreneurs rely on non-disclosure agreements to protect its trade secrets, intellectual property, financial information, unpublished patent applications, processes or other material.

For example, suppose you are developing a prototype of a revolutionary new product that will make a small fortune. However, you need to hire a consultant to advise you a certain component before you can complete the prototype. You can ask the consultant to sign one of its non-disclosure agreements to ensure that he or she does not reveal its confidential information to competitors.

Or suppose you are contracting with an editor for creating sales letters and emails to use when starting your new product. You have a big launch planned and do not want word out of its new and innovative products. The writer writes for many of its competitors. Although trust him to be discreet, you know that slips of the tongue can happen. You could ask the editor to sign their nondisclosure agreements.

How effective is this?

First, realize that the nondisclosure agreements are legal contracts. Like any contract, which are as valuable as its ability to enforce them. In case of dispute, you may take your case to court and ask the courts to adjudicate and decide on an agreement.

You could try taking a case to court without a confidentiality agreement signed in their place, but in that situation, your chances of having the court award in their favor are rare. Your chances increase dramatically if you have a well written confidentiality agreement. Moreover, the act of signing an agreement increases the likelihood that a third party to keep your secret and not let something without thinking.

The agreements do not have good information at least three main components. First, explain and detail the nature of the material will remain confidential. In Secondly, to outline the possible exceptions, and thirdly, put their expectations of how the third party will use and protect your confidential information.

As exceptions, they realize that it is unlikely that the courts award to it in certain situations. For example, if the third party can demonstrate that the information was public knowledge, have a good case. Or, if the third party can prove that they already had the information before you became involved with or prior to signing the agreement, you have a case. Or, if they can demonstrate that it obtained the information from the other side are in good standing. Finally, in the event of a subpoena, the courts almost always sends a summons to invalidate the contract.

Confidentiality agreements are not effective for those who understand the implications.

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Protect your confidentiality with a lawyer- approved non disclosure agreement. For sample non-disclosure agreements and other business documents, visit Business Writing by Nightcats Multimedia.

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Business Planning