![]() ![]() Signing a confidentiality agreement allows them to mutually share sensitive company knowledge without fear of it becoming public knowledge. Before entering into a formal agreement, doing due diligence on the other party is often necessary. When two or more companies are considering a joint venture, they typically sign an NDA when commencing business. Similarly, contractors are often required to sign an NDA about the project they are working on with a company. It restricts employees from sharing valuable company details they may learn on the job. What is a Non-Disclosure Agreement (NDA)?Ī non-disclosure agreement - commonly known as an NDA or a confidentiality agreement - is a legally binding contract establishing a confidential relationship between two or more parties.īy contractually prohibiting the recipient party from releasing any sensitive knowledge, such as trade secrets or financial information, an NDA allows the involved parties to work together openly without fear of sensitive information becoming public knowledge.Įmployees are often required to sign an NDA as a condition of employment, particularly in the tech industry or entertainment. Financial liability – If monetary damages are proved.Injunction – A court order prohibiting someone from further NDA violation.Legal action – Requiring the hiring of legal counsel to defend oneself. ![]() Attorney’s fees – Legal fees of the opposing party.Breach of contract – Penalties for violating a binding contract.If any terms of an NDA are breached, the violating party could face the following: ![]()
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