What to Consider in a Non-Disclosure Agreement

non-disclosure agreement lawyer Long IslandNo matter what type of business one may have, protecting the business’ confidential information is crucial. Whether it be during the initial startup, bringing in investors, or in conducting other commercial matters, there are many ways a business’ confidential information can be exposed. One way to limit the release of confidential information is through the use of a non-disclosure agreement (NDA). A good practice for any business is to have each individual sign a non-disclosure agreement before speaking about a possible business relationship.  Such an agreement will help prevent them from disclosing or using your information while also allowing you to speak openly with them.


When drafting or signing a non-disclosure agreement, the first thing that should be considered is who the agreement covers.  It is important to make sure that the parties identified in the non-disclosure agreement are the parties you want to be bound by the terms. A common example of this is making sure that any non-disclosure agreement also includes the associates of the signatory to the agreement.  Without explicit language, the associates may not be covered under the scope of the agreement.  Additionally, it may be helpful to ensure the signatory is responsible for the actions of their representatives or associates.


After determining who is bound by the agreement, the next issue to address is what information is covered by the agreement. Oftentimes, a non-disclosure agreement will use the terms “confidential information” or “evaluation materials” when setting the scope of the information covered by the NDA.  While that language may be sufficient in many instances, you want to make sure your NDA is applicable to every possible instance.  When drafting the language, you want to be sure the language is broad enough to cover all of your information, yet narrow enough to be enforceable.  Some examples of this would be by creating a specific list of items (such as all business development plans) or by making a general statement (such as information provided by one party to the other in regard to XYZ’s business).


Once the parties and information covered are addressed, the next consideration should be the terms of the disclosure.  The NDA should lay out what information will be disclosed, what the recipient of the information can or cannot do with the information, and who the recipient may disclose the information to.  It may also be helpful to list some specific penalties for violating the agreement and what remedies are available to the disclosing party. Lastly, it is important to discuss the duration for which the agreement lasts.  It is important to address whether the NDA is intended to be for a limited amount of time, until a certain event occurs, or for a longer period of time.


The above are just some of the issues that one may consider when using or signing a non-disclosure agreement.  There are various factors and events that can affect the terms of a non-disclosure agreement. Before creating or entering into a non-disclosure agreement, it is important to discuss the matter with a competent attorney with experience in business relationships. The New York business and employment lawyers at Blodnick, Fazio & Clark are skilled legal professionals who can assist you in determining how to draft non-disclosure and other business operating agreements. The attorneys at Blodnick, Fazio & Clark will guide and help you find your path to success. For more information or to schedule a consultation, contact our New York business and employment lawyers at (516) 280-7105 or (631) 669-6300.

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