{"id":13915,"date":"2023-07-26T00:37:02","date_gmt":"2023-07-26T00:37:02","guid":{"rendered":"https:\/\/ownr-blog.com\/?p=13915"},"modified":"2023-12-07T14:39:26","modified_gmt":"2023-12-07T14:39:26","slug":"what-is-an-nda-non-disclosure-agreement-and-how-can-i-get-one","status":"publish","type":"post","link":"https:\/\/www.ownr.co\/blog\/what-is-an-nda\/","title":{"rendered":"What is an NDA (Non-Disclosure Agreement) and How Can I Get One?"},"content":{"rendered":"<p>Whether you&#8217;re a business owner, entrepreneur, or freelancer, understanding non-disclosure agreements is vital to safeguarding intellectual property, trade secrets, and other proprietary information. <span style=\"font-weight: 400;\">Let\u2019s take a look at how NDAs work, and how Ownr can help you create custom, effective legal documents at a fraction of the cost of a lawyer.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is an NDA?<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A <\/span><a href="\&quot;https:\/\/www.ownr.co\/document\/non-disclosure-agreement\&quot;"><span style=\"font-weight: 400;\">non-disclosure agreement<\/span><\/a><span style=\"font-weight: 400;\">, or NDA as it\u2019s also known, is a legally binding contract (or part of a larger contract) between two parties that establishes the confidentiality of information. The purpose of an NDA is to prohibit the signed parties from discussing the defined confidential information with any non-authorized individuals.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">For small business owners, NDAs are helpful for protecting trade secrets, intellectual property, or any other proprietary information wherein its confidentiality is essential to the company\u2019s success.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">NDAs are commonplace in business and may also be known by a few other names:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Confidentiality agreement<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Secrecy agreement<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Proprietary information agreement<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Advantages of an NDA<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">For business owners and employers, there are many advantages to using NDAs. The primary benefit is to protect valuable information that gives your business a competitive edge. Some additional reasons that NDAs can be positive for your business are:\u00a0<\/span><b><\/b><\/p>\n<ul>\n<li aria-level=\"1\"><b>They protect business plans and trade secrets: <\/b><span style=\"font-weight: 400;\">If your business relies on proprietary technology, software, or other intellectual property to make a profit, NDAs are absolutely essential to protect them from being shared with others by company employees. They can also ensure intellectual property created by employees is owned by the company, not the individual.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Allow you to disclose confidential information during business negotiations: <\/b><span style=\"font-weight: 400;\">Mutual<\/span> <span style=\"font-weight: 400;\">NDAs can help protect the interests, business plans, and other confidential information of two or more parties while negotiations take place. We\u2019ll expand on the types of NDAs more below.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>They protect employee and customer data: <\/b><span style=\"font-weight: 400;\">Maintaining the privacy of operating information can be important in business. NDAs can cover anything from supplier information to costs to customer lists.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>NDAs build trust in business partnerships: <\/b><span style=\"font-weight: 400;\">It can be a positive signal to other business partners that your company takes the protection of data seriously and may help with relationship building.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>You\u2019ll have better legal protection if disputes arise: <\/b><span style=\"font-weight: 400;\">In the event that confidential information is leaked, it\u2019s helpful to have legally binding documents to strengthen a potential legal case. Non-disclosure agreements provide a clear framework for the use of information so there is little room for misinterpretation. An NDA may also include the consequences for breaching it in order to discourage parties from doing so.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>NDAs are easy to create at a low cost: <\/b><span style=\"font-weight: 400;\">With Ownr<\/span><b>, <\/b><span style=\"font-weight: 400;\">NDAs can be an easy low-cost solution to protecting data. You can create your own NDAs in our platform that are uniquely tailored to your business, at a much lower cost that going to a lawyer. Get started <\/span><a href="\&quot;https:\/\/www.ownr.co\/document\/non-disclosure-agreement\&quot;"><span style=\"font-weight: 400;\">here<\/span><\/a><span style=\"font-weight: 400;\">.\u00a0\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Drawbacks of an NDA<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">In general, non-disclosure agreements offer many benefits, however, they also have negatives, particularly for the individual employee. Here are some things to consider before using NDAs for your business:<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Potential for misinterpretation if they lack clarity: <\/b><span style=\"font-weight: 400;\">When intellectual property and trade secrets that are essential to your business are at stake, you don\u2019t want to risk misinterpretation of the language which can result in legal battles. Ensuring that your NDAs are iron-clad can require the costly input of a lawyer. Ownr can create tailored legal documents that keep your information safe.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>NDAs can be difficult to enforce: <\/b><span style=\"font-weight: 400;\">It may be difficult to identify a breach in an NDA (especially when there are multiple individuals with access to that information), and pursuing action can be time-consuming and costly.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>NDAs can provide a false sense of security:<\/b><span style=\"font-weight: 400;\"> You may be tempted to share more information than is required when an NDA is in place, which could put your business at risk, if breached. Try to limit the information shared with each individual to strictly what is necessary to do business wherever possible.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><b>They may limit your ability to attract talent attraction: <\/b><span style=\"font-weight: 400;\">Some employees may mistrust NDAs and prefer to work for companies without the limitation of a non-disclosure agreement. In some cases, they may create tension or a lack of trust between employees and company management where individuals who prefer to maintain ownership of their intellectual property throughout their employment.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Requirements for an NDA in Canada<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">While an NDA should be customized to your business needs, some basic information is typically included:<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The parties involved (two or more).<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">A description of the confidential information that is protected by the NDA. This information must be confidential (i.e., nothing that is already in the public domain) and it must not ask the parties to do anything against the law.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">The scope and terms of the agreement, including the length of time it is valid.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Any exclusions or limitations.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Types of Non-Disclosure Agreements<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before you create an NDA to protect your information, you should choose the right type. Below are the most common types of NDAs available for Canadian businesses.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Mutual Agreement<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">A mutual NDA is when two or more parties will each disclose confidential information that is protected through the agreement; therefore it is beneficial to each party. This can be especially useful for business negotiations, partnerships or merger discussions where information needs to be shared before reaching contractual agreements. Still, it is in the interest of each party to maintain confidentiality whether or not they close the business deal.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">Non-Mutual Agreement<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">In a non-mutual agreement, one party is sharing sensitive information that needs to be protected through certain limitations by the agreement. This is the most common type of agreement that employees of a company sign before starting employment and accessing confidential information and intellectual property. Essentially, it\u2019s a \u201cone-way\u201d agreement where a party shares information that the other cannot disclose.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Read on for <\/span><a href="\&quot;https:\/\/help.ownr.co\/en\/articles\/1670581-non-disclosure-agreement\&quot;"><span style=\"font-weight: 400;\">more information on the types of NDAs, plus Ownr\u2019s helpful tips for using them<\/span><\/a><span style=\"font-weight: 400;\">.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Exclusions to NDAs<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Depending on the information you are trying to protect, you may wish to include all the information that the NDA protects, as well as an outline of the exclusions\u00a0 covering what is <\/span><i><span style=\"font-weight: 400;\">not<\/span><\/i><span style=\"font-weight: 400;\"> protected by the agreement.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">In other cases, it may be more appropriate to have a blanket agreement that lists just the exclusions. This may be helpful in limiting potential exceptions, for example, if the company develops new intellectual property that was not explicitly covered in the initial NDA.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Example of when to use an NDA<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">It is always best to employ NDAs early in business negotiations so that information is protected and businesses can have open negotiations without the risk of information being released to the public.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Consider the use of an NDAs for:<\/span><\/p>\n<ul>\n<li aria-level=\"1\"><b>Hiring employees or contractors: <\/b><span style=\"font-weight: 400;\">It is a common practice to include an NDA as part of an employment contract to protect the interests of the company.\u00a0<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Partnerships, collaborations, and investor opportunities: <\/b><span style=\"font-weight: 400;\">When discussing trade secrets, and operational and financial information with investors or prospective partners, it\u2019s a good idea to use an NDA prior to beginning those negotiations.<\/span><\/li>\n<\/ul>\n<ul>\n<li aria-level=\"1\"><b>Marketing releases: <\/b><span style=\"font-weight: 400;\">Businesses may require NDAs for employees, contractors, or marketing partners before sharing information about upcoming business plans or product releases.<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Final thoughts<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">If you think your business dealings would benefit from an NDA to protect sensitive information, we recommend making use of one early to protect your business and allow open conversation. A mutual NDA is beneficial to both parties and can inspire trust and maximize the protection for all parties involved.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What is an NDA FAQ<\/span><\/h2>\n<h3><span style=\"font-weight: 400;\">What is the purpose of an NDA?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">The purpose of a non-disclosure agreement is to protect a business\u2019s confidential information so that it can maintain a competitive advantage. This information may include operational, financial, marketing, employee, or customer information and any trade secrets or intellectual property.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">What does an NDA protect against?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Each NDA will have specific terms of what it protects but, generally, they protect against the distribution of confidential information to any non-authorized party. Simply put, they keep your important business secrets from becoming public information.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">What happens when you break an NDA?<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Breach of a non-disclosure agreement can mean legal action, termination of employment and, in some cases, criminal charges. You can choose to include the action taken against a party for breaching the contract within the terms of the NDA so the signing parties know what to expect and to discourage breaking it.\u00a0<\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Non-disclosure agreements can help entrepreneurs protect their data, but how exactly do they work? Let&#8217;s find out.<\/p>\n","protected":false},"author":5,"featured_media":13916,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_feature_clip_id":0,"_jetpack_hide_featured_image":false,"_jetpack_featured_image_duplicate_dismissed":0,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_post_was_ever_published":false},"categories":[962],"tags":[],"class_list":["post-13915","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-legal-and-compliance"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v28.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\n<title>What is an NDA (Non-Disclosure Agreement) and How Can I Get One? | Ownr Blog<\/title>\n<meta name=\"description\" content=\"Discover the importance and uses of an NDA (Non-disclosure agreement). 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