3 Situations Where A Non-Disclosure Agreement (NDA) Is Used

by | Dec 18, 2017 | Featured, Law

A Non-Disclosure Agreement or a NDA is an agreement that imposes an obligation to keep either party from sharing certain confidential information about each other to other parties. What is defined as confidential information can range from client contacts; business strategy; financial situation; pending legal suits etc.

So, if you some information that is key to your business competitiveness, it is best to secure with a NDA. Look back at your business, what is so important that if the public had access to it, your business will lose your advantage. This is 1 area of mistake most businesses who use NDA always make. They copy a template of the internet; or they use the services a lawyer who has no idea what to protect and just drafts a general NDA. If your NDA doesn’t protect your key confidential information, what is point of having one? Each business has their own confidential information to protect. You should know what it is, and your NDA must protect that information.

Here are 3 usual (but not exhaustive) situations where a NDA is used in your business:-

1. Agent / Staff / Employee

Your agents, staff or employees will have access to your business know-how and confidential information. Be it your clients information; vendor and supplier information; formula; intellectual property etc, are all essential information that a businesses must protect from being disclosed. Although some information are not allowed to be disclosed even without a NDA, it is commercially prudent to have a NDA, as this will also put your agent, staff or employee on notice that certain aspects of your businesses cannot be disclosed. Do bear in mind that not all agent, staff or employees are aware of the non-disclosure nature of business.

2. Business Collaboration

This is where you are planning to take in either an investor; business partner; or joint venture. There will be certain confidential information that the investor, new business partner or joint venture partner will need to have a look (financial details, profit & loss etc). You do not want your business information being made known to the public and your competitors.

3. Outsource Partners

This is when you outsource your work ie. legal, accounts, marketing, HR etc. These groups of people will have access to some or most of your business information.


Not sure what information to protect? Not sure whether a particular business arrangement requires a NDA? Consult your commercial lawyer to find out more.

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