More than 3,500 confidentiality or non-disclosure
agreements are signed in Australia every day. Okay, we totally made
that number up but trust us, it's a lot.
NDAs are often exchanged when businesses need to share
commercially sensitive information to figure out whether they want
to work together. Start-ups ask potential investors to sign an NDA
to keep secret their business idea that will take over the world.
Procurement departments will demand a signed NDA from prospective
vendors before issuing EOIs, RFTs and RFPs.
They're used every day by businesses of all sizes, but are
NDAs actually good for anything? Here's what you need to
NDAs protect confidential information. If your
NDA doesn't properly identify the information you want to
protect, it's worthless. Don't assume your template NDA
covers everything. If you're planning to share customer data,
make sure the definition of confidential information in your NDA
refers specifically to customer data.
NDAs explain what the confidential information can be
used for. If your NDA doesn't clearly spell out the
circumstances under which the information can be used, it's
NDAs won't save you from a disaster. If
your NDA is sufficiently specific, it's enforceable like any
other contract. You can ask a court for injunctions to prevent a
breach of confidentiality, and you can sue for damages if it's
But let's be realistic here. If information leaks, you may
not be able to pinpoint the source. And once you've lost the
secret recipe for Coca-Cola, it's gone forever. So, while
it's always better to have an NDA than not, your best
protection in reality is other people's integrity. And
don't give anyone the crown jewels.
We do not disclaim anything about this article. We're
quite proud of it really.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
We discuss whether certain clauses commonly found in ordinary commercial contracts could be considered to be penalties.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).