Do I Need An NDA?
Non-Disclosure Agreements (NDAs) are commonplace in many business agreements, but when should you introduce an NDA and is it really necessary?
There are many risks you’re running for your business if you don’t prepare an NDA to be signed by the right parties. Legal Nature lists five key threats you can easily protect against with an NDA. However, to get a clearer insight, we sat down with Lawrence Chaney, Partner at GPS Legal & Consulting.
GPS Legal & Consulting is a full service law firm providing legal counsel and business management services to resident and overseas individuals, local and regional SME’s, and global multinationals in Thailand. They have seen their fair share of cases involving disputes that could have been or were settled with a signed NDA.
FIRST BUILD TRUST, THEN PROTECT IT
“It begins with trust,” remarks Lawrence, “to avoid disputes, you first need to have relationships based on trust and when applicable, an NDA to cover that trust were it to be broken.”
So when is an NDA needed? Lawrence aptly explains: “When a person or business is transacting with another business or person where they are going to be sharing potentially propriety or confidential information to achieve a mutually desired objective – that’s when an NDA is needed.”
Think of it this way: you can shake hands and leave someone with information that is crucial to your business operations and trust that they won’t share that – or you can cover yourself by getting them to sign an NDA.
STATE WHAT’S TO BE KEPT CONFIDENTIAL
You need to clearly state what exactly is to be kept confidential. It could be the entire exchange of words and ideas during a meeting, or the knowledge of a marketing plan for the year ahead. Whatever it is that you don’t want shared outside a specified person, company or other 3rd parties, state it in the NDA. You’ll also need to say for how long these things need to be kept quiet. Some things can be required to be kept secret forever, but other’s can’t, so make sure you put in a realistic time frame for how long you want your secrets kept under wraps.
“Typically in an NDA there’s a party disclosing information and a party receiving the information (sometimes both can be disclosing information). The NDA binds the receiving party into protecting that information. Make sure both you and the person receiving the information sign that document – that’s crucial” says Lawrence. “Only include things to be protected that would cause some form of damage to your business if they became public knowledge.”
DON’T RISK IT – KEEP YOUR INFORMATION YOURS
So what can go wrong if you don’t have an NDA? “If there’s no binding contract to keep your information protected, you’re at risk of damage being inflicted upon your business with little or no recourse should that information get released to the wrong people or into the public domain,” says Lawrence. With an NDA agreement signed, you can rest assured that were your secrets to be let out, the party that broke that binding agreement wouldn’t have much of an argument when it comes to legal ramifications.
For example, say you had a meeting with your creative agency to design ads and promotions featuring your marketing plans that you believe will bring more customers in, and that your promotion puts you one step ahead of your competition. You’re going to want to make sure those ideas stay a secret until the day the ads go public. By letting the creative agency know your plans, they’re now in possession of crucial information that, if shared with your competitors, would be a massive blow to your campaign. Get them to sign an NDA that states all marketing information is to be kept silent until the day of the promotional launch.
Here at Vimi, we’re entrusted with sensitive data on a frequent basis and NDAs are common for our operations. We understand that the information that you provide us can sometimes be highly confidential and we’ll keep it that way.
If you’d like to get in touch with us about your ideas, contact us today and we’ll send you a quote right away!