Certain terms are likely to crop up in non-disclosure agreements (NDAs). It is a good idea to understand these terms and their definitions.
|Term||What is it?|
|Confidentiality||A legal principle that maintains secrecy between parties.|
|Owner or discloser||The name of the person, organisation or business disclosing the information.|
|Recipient||The name of the person, organisation or business that is receiving the information and that is responsible for ensuring its confidentiality.|
|Statement of reasons||A short paragraph defining the context in which the information will be disclosed and why the parties want to make the information the subject of a contract.|
|Subject||The information and documents that will be the subject of the confidentiality agreement.|
|Penalty clause||An optional way of fixing an amount of compensation that the owner or discloser is paid if the recipient breaches the agreement.|
|Confidentiality clause||An optional clause that requires both parties to keep the existence of the confidentiality agreement a secret.|
|Term of agreement||How long the obligations of the contract last for.|
Read more about negotiating the terms of a non-disclosure agreement.