A commentator in a recent legal article on a key business agreement terms that contract “foundational” and, indeed, it is hard to view it as being anything other than that.
That document goes by various names, including confidentiality agreement or secrecy agreement.
In the business world, though, it is perhaps most commonly given the tag of nondisclosure agreement, or NDA in shorthand.
And, to be sure, nondisclosure agreements are foundational, because of their function — as noted in the above-cited legal overview — in “outlining a party’s rights, duties and responsibilities regarding the disclosure, receipt and protection of confidential information.”
Assuredly, it is hard to envision many things as being more important than that, especially when a disclosing party in a contract has important trade secrets, propriety rights and/or other intellectual property to safeguard.
NDAs run the gamut from contractually enforcing mechanisms relevant to disclosure and protection in relatively simple agreements like straightforward vendor contracts to the most complex of transactions (e.g., a contemplated joint venture, technology transfer or merger/acquisition).
The aforementioned commentator makes a preliminary and most basic point regarding NDAs, namely this: Boilerplate language will seldom do in their drafting.
Notwithstanding that admonition, though, “rote reliance” on generically crafted definitions, exclusions, governing law, confidentiality terms, the return of confidential information and so forth is precisely what features in many secrecy agreements, perhaps because they are so common and often relied upon.
Every situation contemplating the sharing of confidential data is different, though, which understandably begs the close and studied input that a proven business and commercial law attorney can bring in the negotiation, drafting and enforcement of a nondisclosure agreement.
As the above article stresses, “NDAs should always be carefully reviewed and never taken for granted [italics in original].”