What is a Non-Disclosure Agreement?

A brief overview of what a Non-Disclosure Agreement is and how it can be used.

A Non-Disclosure Agreement is a legally binding document that prevents two or more parties from openly disclosing information outside of their relationship.

The Non-Disclosure Agreement will have a minimum of two parties to that Agreement. You can have more than two parties to the Agreement. What you need to bear in mind is that the more people that are parties to the Agreement, the weaker the Agreement.

Why is that the case?

Well, Non-Disclosure Agreements protect information at a Macro level. The more people that know of the information, the more likely it is that the information will escape the confines of the Agreement.

The best practice regarding Non-Disclosure Agreements is to keep the party numbers small and to not hold conversations in public places.

How to use a Non-Disclosure Agreement

You could use a Non-Disclosure Agreement in two ways. Preventing a party from revealing information to the wider public that might affect you. Or, you could use it in the more common way which is to allow businesses to discus their proprietary information in confidence that the information it will not be divulged to the wider public or their competitors.

Non-Disclosure Agreements can be powerful tools in both the protection of reputation and proprietary information.

A Non-Disclosure Agreement is also a powerful method for business development. A lot of businesses look to improve their knowledge in areas or want to understand the capability that their Supply Chain has.

Having the protections detailed in a Non-Disclosure Agreement gives an Organisation the confidence to have discussions regarding their knowledge that could only otherwise be misused or mistreated.

All businesses should ensure that they have a legally binding Non-Disclosure Agreement within their tools/templates.