Pitfalls in Non-Disclosure Agreements

A Non Disclosure Agreement (NDA) is a legal contract between a “provider” of confidential information and a “receiver” of confidential information. The contract spells out the rights and responsibilities of each party with the dual aims of: protecting the information’s privacy and using the information productively.

Some common pitfalls in drafting NDA’s include:

• Indefiniteness – not having a limiting time frame

• No Exceptions to Disclosure – there may be exceptions like disclosure compelled by Court order

• Over-inclusiveness – avoid language that could lead to the creation of a joint venture or partnership on this issue or others

• Promising complete destruction of information – costs and logistics must be considered

• Limiting Intake – trying to circumscribe the flow of information may undermine the parties’ ability to get the project done

• Limitless remedies – both sides will want a definitive damages amount (for enforceability on hand and as a cap on the other hand)

To avoid these pitfalls and ensure that the NDA both protects the information but allows for the project to move forward, you should consult an experienced attorney to assist you.