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How do nondislosure agreements work?

On Behalf of | Oct 30, 2019 | Firm News |

It is not uncommon anymore for people in New York to be required to sign confidentiality agreements when they begin a new job at a new company. This is just one of the many times when these contracts are used in the business world today. A nondisclosure agreement, as the name implies, is a contract between two parties that sets forth terms for protecting sensitive information. There can be a variety of ways such a contract may be worded or developed. 

As explained by Forbes, it is important from the outset to very clearly identify what information is to be kept in confidence. This should include the identification of any specific communication channels. For example, it may be acceptable to discuss certain items verbally but not in writing, such as in an email. A nondisclosure agreement may have a specific duration and expiration date as well. 

Some contracts may have exclusions that should be included. One example may be the ability to share the confidential information with a specific party but not with any others. Another element to some confidentiality agreements is the two-way nature of the required nondisclosure. This is called a mutual NDA where both parties are subject to keep certain information confidential. A good contract should provide details as to how any potential disagreement may be resolved, such as the requirement to use mediation or arbitration instead of filing a civil lawsuit. 

This information is not intended to provide legal advice but is instead meant to give an overview of some of the important elements that should be detailed in a nondisclosure agreement or a confidentiality agreement.