Some of the most important business assets you own maybe your methods and procedures.
Among the most important characteristics that make up your business may be intangible things like methods and tactics that contribute to your success or intellectual property in the developmental stages that may not be ready for copyright or trademark protection. So how do you protect these important things if you decide to discuss your business with a potential partner or interested buyer?
What is a Non-Disclosure Agreement and why should I use one?
A Non-Disclosure Agreement (NDA) contains contractual obligations between parties that are discussing confidential or nonpublic information. Parties in negotiation usually utilize a Non-Disclosure Agreement but the promises and obligations in the agreement survive the negotiations and are enforceable in court if the provisions are breached. The use of this type of document allows parties to a negotiation to confidently disclose confidential information that they would not otherwise wish to share.
If you are considering selling your business to a competitor, would you be comfortable sharing your most sensitive information in negotiations without being certain that the negotiations will result in an agreement to purchase your business? Probably not unless the information you share cannot be used by the other party for any reason other than the consideration of the purchase of your business.
The same issues arise of you are considering bringing in a business partner to provide an investment in the business or to work with you in the future. Certainly you would not want to share information that would allow anyone to compete with you using your ideas and confidential business practices.
The essential element of a Non-Disclosure Agreement is confidentiality.
In the typical NDA, all parties to the negotiations agree to protect each other’s confidential information from disclosure to third parties and to refrain for any use of the information other than the consideration of a future relationship. The prohibitions in the Agreement should always survive the negotiations and be separately enforceable in court with certain damages available in the event of a breach of the Agreement.
Protect your business.
Contact an experienced business attorney to assist you if you are thinking about selling your business or taking on new partners. Questions about Non-Disclosure Agreements or other business law issues? Call Gogel & Gogel or visit us on the web at http://www.gogel-gogel.com.