What Are the Benefits of A Connecticut Non-Disclosure Agreement?
Business dealings often involve the exchange of highly confidential information. A non-disclosure agreement (NDA) is an effective way for business owners and entrepreneurs to protect sensitive information from being shared or misused. An NDA is a legally enforceable contract that establishes a private relationship between two or more parties. The involved parties agree not to share or profit from confidential information to which they are made privy. NDAs, also called confidentiality agreements, are a valuable tool for businesses.
Non-Disclosure Agreements for Business Negotiations
Non-disclosure agreements can be used to protect sensitive information that is shared during business transactions, such as the buying or selling of a company. For example, if a business owner is interested in selling his or her company, he or she will almost certainly meet with potential buyers to discuss the business in detail. A potential buyer may have access to proprietary information, product designs, marketing strategies, trade secrets, business practices, and other information that could be used as leverage in other business dealings. Asking a potential buyer to sign an NDA prevents the buyer from misusing sensitive business information or sharing that information with others. If a party signs a confidentiality agreement and then violates the terms of that contract, the injured party has the right to seek financial compensation for breach of contract.
The two most common types of NDAs are unilateral NDAs and mutual NDAs. A unilateral NDA is a contract where only one party agrees not to disclose sensitive information. In a mutual NDA, all of the parties involved agree not to share certain confidential information.
Employee Non-Disclosure Agreements
Sometimes, an employee is asked to sign a non-disclosure agreement with his or her employer. The NDA prohibits the employee from sharing sensitive information during his or her employment and, in some cases, after the employee’s termination. In order to be legally binding, an NDA must offer some type of benefit to the person signing it. In the case of most employer-employee NDAs, the benefit offered is the job itself. An employee asked to sign an NDA may be prohibited from sharing information such as sensitive customer data, financial information, business strategies, and more. Many NDAs also include provisions directing employees to return technology and access to confidential company information at the end of their employment.
Contact a Fairfield County Business Law Attorney
Contract drafting and review, business sales and purchases, contract disputes, and other business law issues can be complicated. The Law Offices of Peter V. Lathouris, LLC has handled many types of business law contracts, and we will assist you with all the required legal steps. If you are buying or selling a company, find out how a non-disclosure agreement can protect your rights. To speak with an experienced Stamford, CT business contract lawyer, call us today and schedule a confidential consultation.