Last updated on February 3rd, 2020 at 06:17 am
You don’t have to own a Fortune 500 company or have a large staff to use non-disclosure agreements (NDAs). Businesses and organizations of all sizes and types can benefit from a legally binding agreement that protects confidential information. Businesses of every size also benefit from optimizing their NDA management system — and our guide can get you started! At the same time, understanding when your company should request NDAs is essential to using them strategically to protect your business.
What Is an NDA?
Chances are you probably signed such agreements in the past. Before creating an NDA specific for your business needs, it is important to fully understand what an NDA is (and what it is not).
NDAs Are Legal Documents
An NDA provides the legal framework necessary for sharing confidential information with someone outside your company. Protecting sensitive information is vital to keep it from being stolen or accidentally released to the public. NDAs include language about the consequences of violating the agreement. Depending upon the terms of the agreement, the consequences may include financial compensation and/or criminal charges.
What NDAs Are Not
Public information is not something to include in an NDA. Additionally, an NDA may not protect you if the other party can prove in court that they obtained information before signing the agreement. An NDA also may not protect you if a court subpoena requires someone to share information contained in the agreement as part of their testimony.
NDAs are made simpler with content management software. By storing everything in one place and allowing access to certain people, the process is less overwhelming and more likely to meet any deadlines.
When to Request NDAs
The nature of the business relationships you enter into determines whether or not you need an NDA. Standard operating procedures that request NDAs from those you are about to do business with are smart. It is better to err on the side of caution than to risk the loss of confidential information.
The following examples demonstrate when it makes good sense to request an NDA:
- You’re working with a vendor who may also do work for a competitor.
- Employees have access to sensitive information they could steal upon leaving for another job.
- Negotiations involve financial numbers regarding a potential sale or investor partnership.
- An independent contractor is providing custom work or services on proprietary materials.
- You’re forming a business relationship that requires integration with proprietary systems.
An NDA is a business document that, in order to have success, must not involve personal feelings. If a particular vendor is someone you know from the community, you cannot let your friendship interfere with your business relationship. While that is often easier said than done, the right friend will gladly sign your NDA.
Potential partners are also potential competitors. Requesting that they sign an NDA isn’t a matter of trust. It serves more as insurance that the information shared remains confidential and keeps everyone on the same page
An NDA is generally one of two kinds: unilateral or mutual. A unilateral NDA means there is one party requesting the document. A mutual NDA means two parties request an NDA from one another for mutual protection.
Ready, Set, Template
When it comes to NDA documents, there is no need to reinvent the wheel. Templates that you can customize are just one helpful feature of ContraxAware. Document management for revision tracking and document comparison helps streamline your NDA process. Also, you can build in triggers that automatically tell people when the circumstances are right to request NDAs.
Saving time, saving money, and earning an ROI is what makes your business successful. When you decide to request an NDA from employees, vendors, or others with whom you do business, consider giving ContraxAware a try.
At ContraxAware, we believe businesses of all sizes deserve a contract management system that is easy to use. Our leadership team has more than 30 years of software development and business law experience. This combined experience led us to develop and manage a software system that serves as a collaborative, time-saving tool.
Requesting an NDA protects you from the loss of confidential information. It only takes one disgruntled employee or vendor to potentially ruin your business by sharing private data — don’t let this happen to you.
Take a proactive approach to protect your company’s best interests by requesting NDAs and managing them from start to finish. To develop and manage your NDAs with various business partners, use ContraxAware. You can even try it for free.
Once you decide you love it, you can choose from several subscription plans. Online and phone support are just a click away. You’ll never have to stress over another NDA again. To learn more about how ContraxAware can revolutionize your contract management, contact us.
Business partnerships and relationships are essential to the economy. In order to achieve success, sharing confidential information is often a must. ContraxAware has everything you need for creating, managing, and storing all your business contract needs. Spend less time stressing over NDAs and more time fostering relationships that benefit your business’s bottom line.