A Non-Disclosure Agreement, or NDA, is a contract that protects someone’s private and proprietary information from being shared with anyone who should not have access it. Often, this is the case when one party is divulging trade secrets or private business practices to another party, and the divulging party doesn’t want those secrets or practices to be shared with the public or anyone outside of the contracted relationship.
An NDA protects the party who is sharing information (such as a customer) and prohibits the other party (Hawk Machine Works Ltd.) from revealing the information to anyone else.
What is confidential information?
Confidential information means, in the business context, all non-public information relating to the company’s affairs and business.
An NDA can be used for a variety of confidential information, such as:
- Customer information and data like names, contact information, or purchase histories
- Intellectual property that is a result of creativity like manuscripts, inventions, or new trade procedures that one might copyright, patent, or trademark
- Marketing practices, service procedures, and product information
- Accounting or business contact information (e.g. suppliers names and information)
- Business strategies or goals
- Technical “know-how” and production methods
- Work, research, data, products, etc. developed by employees through the course of their employment which is proprietary to the company
What is a Non-Disclosure Agreement for?
There are three main types of NDAs:
- Employee Non-Disclosure Agreement: used when an employer divulges business, client, or trade information to an employee, contractor, or consultant, or to an applicant for one of those roles
- Non-Disclosure Agreements for inventions: used to protect intellectual property when inventions of creativity such as products, blueprints, designs, or practices are disclosed to another party as part of a professional relationship
- NDAs for business transactions: used to facilitate commercial due diligence when the prospective seller of a business discloses information about employees, clients, business practices, trade secrets, profits, and losses to a would-be purchaser
Mutual Non-Disclosure Agreements can be used in any of these circumstances. Mutual NDAs protect both parties so that neither party can disclose the other’s sensitive information to anyone outside of the contract.
How long is a Non-Disclosure Agreement valid for?
NDAs can be ended on any date within reason depending on the specifications of the contract. Generally, if and when the information becomes public (by means other than a breach of the confidentiality agreement) the information loses its confidentiality, so the information in the NDA will no longer be privileged.
The parties receiving confidential information are usually required to keep track of all the information they have been entrusted with, and the information remains proprietary to the disclosing party who can demand the return of the information at any time. In such a case, the receiver will have to return all the information, destroy any copies (including notes and memoranda pertaining to the information), and will have to provide certification that the materials have been destroyed.
Hawk Machine Works Ltd. is bound by our NDA (Non-Disclosure Agreements) with our customers.
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