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What You Need to Know About Non-Disclosure Agreements in Business

If you have lots of business ideas and some possible investors and partners you may be nervous about sharing those ideas with them. Original ideas can be gold in today’s fast moving techno world so you are probably right to be anxious when discussing an idea or proposition with a potential business partner or investor. That is why you should be using Non-Disclosure Agreements. Non-Disclosure Agreements can be useful in protecting your brainstorms and it is essential to know more about them and learn exactly what they are. In its most basic form, a Non-Disclosure Agreement (commonly referred to as NDA) is a written document between two people or entities whereby they agree not to disclose any confidential information received to any third party, thus avoiding ‘shoplifting’ of the idea. Like any contract, a NDA can be as all encompassing as you want. You may choose to discuss this topic in detail with your business attorney. You might also think about obtaining a trademark, copyright or patent before you discuss your idea or concept with third parties. What are the advantages of an NDA? -- It binds the other party from disclosing the information. -- It can be enforceable (although it may not net you significant money damages). -- It puts others on notice that you are very serious. -- It can be effective if presented to a investor or potential business partner at the right time.   What are the disadvantages of a NDA? -- It can be a turnoff at the outset, akin to a romance killing pre-nuptial agreement. -- Some investors or potential partners will balk at signing since they believe most ideas are in the public domain or are not that original. They may see and hear many ideas each week. They don’t want to keep something secret that they think may already be known. -- Even if you have a solid NDA, litigation may take a long time to go through the court system by which time similar ideas may have cropped up. Bottom line: it is better to have an NDA than not as it will afford you some legal protection. You should also remember to keep meticulous records of who has seen your information and who has signed the NDA. Always ask to have your documents returned. Impart information on an as-needed basis. There is an art to writing Non-Disclosure Agreements especially in regard to what terms and clauses need to be in them. Further, an NDA may require other specific language depending on the type of business you are in. Consulting an attorney about an NDA is often a wise move in business. R. D. Adair, PLLC offers experienced business counsel and can assist you with your  business legal issues such as Non-Disclosure Agreements. To learn more about issues surrounding Non-Disclosure Agreements or how we can assist you in a related matter, contact us today to schedule a consultation.

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