Share

Business Advocate Law Legal Blog

Monday, March 27, 2017

Use of Non-Disclosure Agreements

As a small business owner, it is essential to protect sensitive information that is often referred to as trade secrets. While some well known examples of trade secrets include the formula for Coca-Cola and Google's algorithms, any business information such as practices and techniques, processes and procedures, needs to remain confidential. In some cases, business data such as client and vendor lists may qualify as a trade secret.

Although trade secrets and other confidential business information are protected by state and federal laws, it is crucial to secure this information through the use of a confidentiality or non-disclosure agreement. In sum, this is a legal contract between two or more parties in which the party receiving the sensitive information agrees not to reveal it to any other party without prior permission or authorization.

In situations in which a business engages with vendors or enters into a strategic alliance with a similar business, a separate, stand-alone agreement can be used. Similarly, confidentiality provisions can be incorporated into an employment agreement for employees who are given access to sensitive business information. In either case, common provisions included in these agreements include:

  • A definition of the confidential information (but usually not the protected information itself)

  • An explanation as to why the information is being provided to the receiving party

  • Terms under which the information may be disclosed to appropriate parties (such as on a need-to-know basis)

  • The circumstances in which the information may or not be used

  • The duration of time  the information must be kept confidential

In order for a non-disclosure agreement to be enforceable, it must be deemed fair. A court typically looks to whether an agreement is overly restrictive in making a determination of fairness. If the contract is unduly burdensome to the party receiving the information, a court may find all or part of the agreement invalid. If the information has already been revealed to a third party and the agreement is deemed to be invalid, a business may be barred from recovering damages for its losses. For this reason, it is crucial to consult with an experienced business law attorney who can help to prepare a well designed non-disclosure or confidentiality agreement.

 


Archived Posts

2017
2016
December
November
October
September
August
July
June
May
April
March
February
January
2015
December
November
October
September
August
July
June
May
April
March
February
January
2014
December
November
October
September
August
July
June
May
April
March
February
January
2013


Business Advocate Law PLLC is based in Seattle, WA and servers Western Washington with services tailored to business owners. Areas we serve include Kenmore, Woodinville, Seattle, Kirkland, Redmond, Lynnwood, and the surrounding areas of Western Washington.



© 2017 Business Advocate Law PLLC | Legal Notice/Privacy Policy
1700 Seventh Avenue, Suite 2100, Seattle, WA 98101
| Phone: 206-954-9200 | 206-369-3912 (Cell)

Business Law | Civil Litigation | Securities Law | Business Litigation

Attorney Website Design by
Amicus Creative


© Business Advocate Law PLLC | Legal Notice/Privacy Policy | Law Firm Website Design by Amicus Creative
1700 7th Avenue, Suite 2100, Seattle, WA 98101 | Phone: 206-954-9200 | Cell: 206-369-3912