Confidentiality agreement solicitors
Confidentiality Agreements are increasingly commonly used in many business contexts, predominantly because IP has become such a valuable and important business asset and where collaborations and joint ventures are very popular.
As with most other agreements, many clauses in a confidentiality agreement are quite standard but careful thought and consideration are always advisable. There are potential pitfalls and it’s essential to understand what’s in a draft NDA, why it’s there and the potential implications.
Non Disclosure Agreements typically allow you to disclose information to a third party, such as customers, suppliers or persons you may be considering entering into some kind of business venture with.
Typical uses for confidentiality agreements
- For employees
- Relating to any type of IP or invention
- Where business and sales agents are used by your business or you have distributors under a distribution agreement.
- Key service providers such as IT services – with GDPR now in place, it’s essential to ensure suppliers keep information and data confidential.
- where parties are negotiating a business transaction such as a business sale or a joint venture.
Drafting points and key clauses in NDA agreements
- always consider who you need to sign an NDA – if you are dealing with a corporate entity is that good enough or should the relevant employees in that limited company also be required to sign? Ensuring that signatories face a personal liability risk generally offers more assurance.
- Don’t include clauses which are excessive and which may not be enforceable – for example, it may be tempting to include a clause whereby if there is a breach there is a huge financial penalty specified – these types of clauses, known as liquidated damages clauses, are generally not lawful under English law.
- Do include lawful safeguards such as potentially a clear clause stating that if there is a breach, the innocent party will be entitled to apply for an injunction.
- Jurisdiction – very important if you are disclosing confidential data to a person or business not in the UK – ensure that the agreement provides that English law applies and the English courts have jurisdiction.
- Return of data and prohibition on making copies including on any form of media, not just paper.
- staged release of information – to be on the safe side, if the disclosure is very sensitive information, it may be best to test the water first, disclose some parts and keep the most sensitive information or trade secrets until the other party demonstrates trust and/or moves forward towards formalising any underlying proposed business arrangement.
If you need cost effective, experienced lawyers for a confidentiality or NDA Agreement or have any questions or a dispute over trade secrets or confidential information breaches, please do call or email us.