There are many situations in which a Non-Disclosure Agreement may be created. Some of the most common types of information that are protected in this document are:
- Intellectual property, such as trade secrets or invention plans
- Sensitive details regarding a joint venture, merger, or acquisition
- Private customer details, including purchase history and payment information
- Product plans and marketing strategies
- Business operations and accounting information, such as payroll reports and internal costs
LawDepot’s Non-Disclosure Agreement is ideal for several different situations, such as:
Hiring
A Non-Disclosure Agreement may be drafted at the start of professional relationships where a client or employer hires a contractor, consultant, or employee. Often, an employment contract will include a confidentiality clause, but sometimes a separate document needs to be signed first, if there will be business discussions or negotiations before the terms of employment are finalised.
Hiring staff or contractors may result in sharing sensitive company information, such as marketing strategies, development ideas, and intellectual property. A unilateral Non-Disclosure Agreement can ensure this information remains confidential.
It’s best practice to draft an Employment Agreement, Independent Contractor Agreement, or Consulting Agreement to outline the terms and conditions of your new professional relationship.
Selling a business
Business acquisitions and mergers usually involve a due diligence phase, during which the seller discloses confidential financial and client information to the prospective buyer so the buyer can decide whether to proceed with the purchase and at what price.
Signing a Non-Disclosure Agreement at the outset can protect the seller's client details, trade secrets, profit and loss statements, and other confidential information from misuse, particularly if the sale does not proceed.
Invention or product development
An invention may be a product, design, plan, or recipe, and the value of this intellectual property often resides in its keeping secret, at least until a patent can be secured. Misusing product development or invention details may result in another company or individual stealing your idea.
A Non-Disclosure Agreement will prevent investors, buyers, product designers, and collaborators from sharing or disclosing intellectual property.