Sometimes a business partnership requires the use of the other company’s NDAs. While this idea may invoke feelings of uneasiness and a lack of control, there are ways you can ensure your business remains protected. The right software management tool can alleviate your stress by providing a system of checks and balances for your peace of mind. Read our comprehensive guide to strengthening your business with a rock-solid NDA management system. That foundation, along with this breakdown, can help your team quickly review another company’s NDA.
What to Watch for with Another Company’s NDA
Certain circumstances, like doing business with the federal government, can dictate what document represents the NDA for your particular project. And not all NDAs are alike. That may sound obvious. But throughout the course of a busy business day, contracts can start to look alike. Reviewing another company’s NDA carefully — detail by detail — is essential for protecting your best interests. Knowing what to look for and how to spot what is missing can protect your company from a potential loss of private information. By using this review checklist, you can better navigate another company’s NDA in a more timely manner:
Look for What Is Included
Public information — There is no need for including public information in an NDA. If such information is in the NDA, it simply takes up unnecessary space. If you have any qualms about the potential partnership, ask yourself why a company may include public information. Is it a way to throw you off track of the company’s hidden agenda? Or do they not understand the main purpose of an NDA? If either scenario is the case, then you may want to reconsider your partnership.
Employee specifics — When it comes to sharing or purposely leaking confidential information, disgruntled employees often do it best. Just because a company has 200 employees doesn’t mean that all 200 need access to the project. Outlining who or what types of employees will work with your private information requires careful review. The NDA should restrict the sharing of data with anyone who is not involved with the agreement.
Look for What Isn’t Included
Duration — An NDA should address the duration of the agreement. The time frame will vary depending upon the scope of work. A start and end date allows everyone to plan accordingly for the terms and conditions of the NDA. If the duration isn’t included, be sure to add it (and keep track of redlined copies).
Use of Shared Information — The terms of the NDA should contain language that restricts how the other company uses shared information. You agree to share private information for a specific purpose. Restricting its use by another company can help enforce the understanding that such information is only used for the intended reason.
Penalties — What happens if either party violates the terms of the agreement? An NDA is a legally binding document. Breaking the agreed-upon terms is a breach of contract. There’s no doubt that the other company has a list of penalties included if your company violates the terms. But what about your protection if they violate the terms? Are they included, and if they are, are they the same?
Your NDA Management System Is Your Best Friend
Never sign another company’s NDA without a comprehensive review by your legal counsel. The NDA may contain familiar language to your company’s NDA documents. The similarity may throw you off course and result in the smallest yet harmful detail making it through the final process.
But that’s a lot of work to add to your corporate attorney’s plate. Building standardized workflows and review checklists helps your contracts team share the heavy lifting. That way, when it comes to another company’s NDA, your legal counsel can quickly make the right choice and sign off on a final draft.
Investing in a contract management system can save you time and alert you to possible red flags. ContraxAware’s built-in features allow you to set alerts and to share information with your legal counsel faster. While your legal team is essential when it comes to reviewing legal documents, ContraxAware creates time for other important projects and tasks.
NDAs are important legal documents designed to protect your company’s most precious information. No matter the size of your business, at some point, an NDA will cross your path. When it does, a contract software management system can make the process easier for you and your employees.
ContraxAware is a contract software management company that can better serve your NDA needs. From templates to reminders, ContraxAware is a comprehensive and easy-to-use software that provides a system of checks and balances for your company. Our leadership team includes more than 30 years of software development and business law experience.
Streamlining your NDA management processes is easier than ever before — whether you’re using another company’s NDA or an internal template. ContraxAware is a one-source, collaborative tool for your team. Learn more about ContraxAware with a free trial. Once you use it, you’ll wonder how you ever worked without it.
Subscription plans include online support and other great features. Manage your NDAs, and those sent to you, more efficiently with ContraxAware.