Understanding Non-Disclosure Agreements

Understanding Non-Disclosure Agreements is the first step in coming to a mutual understanding of an NDA. Sometimes, you may ask, “How can I know what is in an NDA, and what is it protecting?

Understanding Non Disclosure Agreements

Let me be blunt, if you have not previously thought about what is in non-disclosure agreements, then that is truly unfortunate. It really would be nice to know what is in an NDA.

Once you have a better understanding of what is in non-disclosure agreements, then you can understand why many business owners and managers refuse to sign an NDA. Why sign an NDA, when the provider is demanding in a technical paragraph, terms and conditions of your business or if the non-disclosure agreement is a variation of “must have a signed agreement, or else” or if the agreement is “whoa, mate, it’s our business, we’re in it alone.” (depending on your team of negotiators).

There are certainly a variety of non-disclosure agreements. Some are simply good business practices that might result in legal representation for you. Some are extremely controversial and are not always enforceable.

The biggest misunderstanding about NDLs is that it is something that every business owner must sign in order to operate in a business environment. In other words, if you get an NDL from a supplier, you sign it. It becomes the way that you do business. What this really means is that for many companies, an NDL is the only means of reaching their current and future customers.

The next category of non-disclosure agreements are those agreements between suppliers and the supplier’s product or service provider. It is common for a supplier to have a list of terms and conditions that every supplier must have. The product provider will protect their interests in a NDA in two ways.

The first method is through the United States Uniform Commercial Code, which protects the interest of the products and/or services in the product provider. This method is often the first thing a supplier takes away from you, should you take out a commercial lease. To protect themselves and their business, many sellers feel it is their obligation to explain and educate their customer about the conditions of the contract. They also attempt to protect their product.

The second method of protection is through anti-SLAPP laws. These laws protect the rights of the seller and the plaintiff’s lawyer by protecting them from the commercial nature of a lawsuit. They are not intended to protect the consumer. SLAPP laws, to some degree, protect both the product and the seller, or at least the seller’s potential due process rights. Although the product and seller may have an interest in their contracts, SLAPP is not meant to protect the consumer.

The final category of non-disclosure agreements is those between business owners and the third party. Many businessmen will retain legal representation when it comes to contract situations. It is very common to have an attorney for contracts involving trademarked or copyrighted products. As a general rule, a lawyer for contracts is not always the best policy.

One thing to understand when working with a third party is that they are not necessarily legally obligated to protect your interests. There are often some hidden terms or conditions that do not make it into the NDL. And a lawyer to represent your interests and with the perfect agreement will not always be available or competent. A specialist can provide you with insight and provide you with advice on the parties in the contract.

Understanding Non Disclosure Agreements and being knowledgeable of what they are protecting and to whom they are related, can often make the difference between losing a contract or you and your business. If you are a business owner with products or services to sell, you owe it to yourself to understand what is in a NDA and make it clear to all parties that you are committed to confidentiality and not to ever sign an NDA.