How Non-Disclosure Agreements Can Save Your Business
Posted on Feb 10, 2020 8:29am PST
Non-disclosure Agreements, commonly referred to as an “NDA”,
is an extremely important Contract to have available and to execute with
third parties during all stages of business development and operation(s).
Initially, when a business owner has a business idea, that business idea
is not automatically protected in any way from theft or use by third parties.
For example, if a business owner meets with a third party and discloses
any details related to his or her idea, then such third party who hears
the idea can take what they heard and use it for themselves to compete
with the business owner immediately. An NDA or Non-disclosure Agreement
would prevent or at least deter this behavior. Of course, that third party
can try to take the idea, however, the Non-disclosure Agreement should
provide for certain remedies that the business owner can pursue in such
event, including an injunction and other damages.
Non-disclosure Agreements are important throughout the entire cycle of
a business, including the start-up phase, during operations and during
growth and/or expansion. For example, a business entity should execute
Non-disclosure Agreements with all employees and independent contractors
working for the business. Any such employees should also sign proper documents
for non-competition to ensure that the business owner’s interests
are protected. Further, an NDA can be used for something as simple as
protecting the procurement of future clients. For example, in a business
meeting, a business owner may consult or discuss their “idea”
to approach or procure a particular client. Without a Non-disclosure Agreement
or with a weak NDA, such third party may approach a prospective client
themselves and pitch the idea, which could leave the business owner losing
thousands of dollars.
Further, some ideas may lead to Trademark, Copyright and/or Patents legal
protection. During such time that the business owner is applying for such
formal legal protection(s) (“Interim Period”), the Non-disclosure
Agreement protects the business owner’s idea until such idea is
formally protected by State and Federal Law and such protection is evidenced
in the public record.
Finally, the best way to implement NDA’s is to make sure that the
Agreement is as strong as possible and to have consistency in procedures
for presenting an NDA for execution by third parties. Always inform any
third parties, employees, independent contractors and the like that this
document is a strict formality of your business and everyone signs it.
Never make any exceptions and if an individual does not agree to sign
the Agreement, then do not give them any information that you would not
want to become public knowledge.
Contact The Presser Law Firm, P.A. for a complimentary consultation to
learn more about Asset Protection, Business Law, Estate Planning, Probate
and/or any other legal needs that you may have.
The Presser Law Firm, P.A.
6199 N. Federal Highway, nationwide FL 33487
(561) 953-1050 or e-mail Info@AssetProtectionAttorneys.com
www.AssetProtectionAttorneys.com
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