According to Mark Roemer Oakland, Non-disclosure agreements (NDAs) also known as confidentiality agreements are extremely important for a variety of business deals. When two companies or individuals sign an NDA, it ensures that neither of them is allowed to make the terms of their agreement public without prior approval. Such an agreement helps to preserve confidential information and protect trade secrets as well.
Here are a few reasons why BDAs are important to companies:
- It allows companies to share confidential information with confidence – Many companies have trade secrets and confidential information that they cannot allow the public or their business competitors to learn. However, it is impossible to get started on new projects without sharing such information with the participants of the project.
Creating NDAs allows both parties to progress the deal since the agreement clearly lists what information is confidential, the consequences of breaching the terms of the agreement, and the time period that the information is supposed to be confidential.
- It limits how the other party can put the confidential information to use – When a party signs an NDA with you for a project, they can only use the confidential information for the specific purpose stated in the project and not for any other purpose. Thus, it prevents them from using your information for other purposes such as selling it for profit.
- It preserves key business relationships – Sharing confidential information is unavoidable when working with other companies and clients on long-term projects. To ensure a smooth flow of information between both parties, it is crucial to sign NDAs. Thus, NDAs make it easier to establish long-term relationships with clients and other businesses, which helps to improve business operations and improve profits due to smoother workflow.
- It clearly lists what information is confidential – Simply stating what information is confidential to you is not helpful and cannot fully enact your thoughts. However, NDAs allow you to list exactly what information you deem confidential and mark it in a tangible form such as writing. You can even list the reason why you consider such information confidential to ensure there is no way the other party can claim ignorance in an attempt to spread confidential or sensitive information about your business.
- It helps to limit the harm caused by the sharing of confidential information – NDAs clearly state what steps the other party should take to ensure the confidentiality of the sensitive information. Plus, it clearly states in writing what the consequences of sharing sensitive information would be. This is often enough to prevent the third party from breaching the NDA.
However, in the event of a breach of agreement caused by the second party, the first party can claim compensation for any loss or damage to the business and can also apply to a court to force the second party to stop sharing the sensitive information further.
Mark Roemer Oakland believes that both small and medium-sized businesses should use NDAs to protect their trade secrets and when focusing on a new project.