How can an NDA protect my Business?

What is a Non-Disclosure Agreement? 

A Non-Disclosure Agreement (NDA) is a legally binding contract that outlines confidentiality obligations between involved parties. An NDA serves to protect against unauthorised disclosure of sensitive information and plays a crucial role in safeguarding a company’s valuable assets and commercial secrets during complex business interactions. 

 

Key Features of an NDA

NDA’s are complex contracts, and it is important to get them right. Some important features of an NDA include the following: 

  • Identifying Parties: Lay the foundation by clearly defining the involved parties. 
  • Definition of Confidential Information: Craft a precise definition, ensuring that what’s confidential is crystal clear. 
  • Scope of Confidentiality Obligation: Determine the extent of the confidentiality obligation on the receiving party. 
  • Exclusions from Confidential Treatment: Outline exceptions carefully to maintain clarity in treatment. 
  • Duration of the Agreement: Set the timeline for confidentiality to ensure ongoing protection. 

 

It is important to note that grasping the intricacies of an airtight NDA goes beyond these essentials. Multiple factors must be considered during the drafting process to ensure its resilience. 

 

When Should I Use an NDA? 

Businesses can use NDA’s in a range of different situations. Some of these situations include when: 

  1. Developing a new product and engaging in funding discussions with external investors. 
  2. Exploring a joint venture with a third-party business or negotiating a collaboration agreement for a new project. 
  3. In the process of selling the business. 

In these instances, where confidential information is likely to be disclosed, the choice between a one-sided or mutual NDA depends on the context. Whether it’s a single party revealing confidential details or a mutual exchange, the nature of the NDA should be tailored to the unique demands of each situation. 

 

The Other Party Has Violated the NDA, What Do I Do?  

Remember, NDAs are not mere formalities—they are fully enforceable legal contracts. So, like any legal contract, violating an NDA is serious and can have serious consequences. If an NDA is breached, the affected party may take legal action. Some remedies available to the affected party include an injunction or damages. 

 

  

Key takeaways 

  • NDA’s are fully enforceable legal contracts. 
  • NDA’s protect confidential information. 

 

Gladwin Legal are experts in Corporate Law and have extensive experience in advising businesses. If you require assistance in understanding your legal obligations please contact us at or 1300 033 934.