Non-disclosure agreement
A non-disclosure agreement sets out the terms for sharing sensitive information securely with others. For example, if your employees have access to important company information. But also investors or a potential buyer of your business. You decide what to include in the agreement. A lawyer can assist you with this.
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What is a non-disclosure agreement (NDA)?
A non-disclosure agreement is often also referred to as an NDA. It is also sometimes called a confidentiality agreement. It is a binding contract. The other party agrees to keep certain information to themselves and not disclose it. In other words, the other party must keep that information a secret.
What does the NDA contain?
A non-disclosure agreement contains the arrangements between you and the other party. You may draw up the agreement yourself. You need to set out at least these points:
- who are the parties involved in the agreement
- the purpose of the agreement
- which information must remain confidential, and which is not
- to what purpose the parties involved may use the information
- for how long the information must be kept confidential
- what happens if one of the parties breaches the agreement. For example, a fine or dismissal
- in the case of a fine, the amount of the fine
- signatures of all parties involved
How long does the confidentiality obligation remain in force?
That depends on the information you wish to protect and the agreements you make. You are free to decide for how long the information must remain confidential. You set this out in the contract. Sometimes a fixed period of several years is agreed, but this is not mandatory. The confidentiality obligation may remain in force indefinitely.
What penalties should you include in the contract?
Consider which penalties best suit the risk you face if confidential information is leaked. Often, this involves a financial penalty or compensation. For employees, you can also use an official warning, suspension, or dismissal as a penalty. Ensure that the measure is proportionate to the value of the confidential information.
Drafting a nondisclosure agreement (NDA) for different situations
It is advisable to draft a nondisclosure agreement (NDA) if you share sensitive information with:
For employees, a non-disclosure agreement is usually part of the employment contract, not a separate contract. If an employee does not uphold the NDA, it is grounds for dismissal. Even if an employee leaves your company, the NDA still stands.
Do you have a good idea or an invention? And are you looking for a partner or investor to help you implement it? If you share sensitive information, there is the risk that the investor or partner will steal your idea or accidentally disclose it. A non-disclosure agreement for your idea or invention provides you with evidence in the event of a legal dispute.
You can protect your idea by registering it as intellectual property with the Benelux Office for Intellectual Property (BOIP).
Have you filed your idea with BOIP via i-DEPOT? If so, you can also sign a nondisclosure agreement there.
Are you considering selling your business? If so, you will need to share confidential information, such as profit figures and your expectations for the future of your business. Ensure that this information only reaches the possible buyer and no one else. So, have them sign a non-disclosure agreement. Include in the agreement that the fact that you are selling your business must remain confidential.
If someone fails to comply with the agreements
Only give others access to the information they genuinely need. Does someone not comply with the nondisclosure agreement (NDA)? Take immediate action to limit the damage:
- Gather evidence. You must be able to prove the violation.
- Impose sanctions. Apply the measures agreed in the contract.
- Seek assistance. A lawyer can help you with legal disputes or taking legal action.