Issues when signing a non-disclosure agreement
Once you sign a non-disclosure agreement (NDA), you have entered into a legally binding contract. This allows you to share ideas with business partners while preventing them from passing this information on.
Problems with non-disclosure agreements
Unfortunately, the contract is only as good as the person signing it. If your partner breaches the contract, you can take them to court for damages, but this might be expensive and time-consuming. It can also be difficult to quantify the damages.
If you suspect that your business partner may be about to breach the NDA, you can get an injunction, ie a court order preventing them from breaching the agreement, to stop this happening.
Agree clear terms of confidentiality contract
To put you in a better position if you do have to go to court, make sure that:
- all definitions and exceptions in the confidentiality agreement meet your requirements
- all terms are appropriate to the type of trade secret you are sharing
If the contract is flawed, it might not provide enough protection. See more on negotiating the terms of a non-disclosure agreement.
The biggest difficulty is often determining exactly what is and what isn't covered by the agreement. The person disclosing the information wants the contract to be interpreted in its broadest form, whereas the partner prefers to see the contract interpreted in a narrower way.
If any issues arise and worry either party, it is possible to change or add clauses to resolve the issue.
For more information, see GOV.UK's guidance on non-disclosure agreements.