Non Disclosure Agreement in Brief

Posted on 8 January 2017



Photo Credit: Gettyimages

Signing of a Non Disclosure Agreement (NDA) is a common business practice, or a prerequisite, before any contract negotiation.

So, what is NDA all about?

The agreement, in this context, aims to restrict the signing parties to reveal any of the confidential information to the third parties. If the signing party breach this contractual obligation it will be termed as ‘breach of confidence’.

Note, if a party receiving confidential information (Recipient) without an enforceable NDA, the Recipient has no legal obligation of confidentiality. Thus, it is important for the party disclosing the confidential information (Discloser), to ensure the Recipient sign the NDA before information is disclosed.

Is all information disclosed during the contract negotiation, will be protected by the NDA?

Nope. The confidential information needs to be properly identified in detail by the Discloser to the Recipient.

In an English case, Suhner & Co v. Transradio Ltd [1967], the Discloser gave the Recipient 246 documents and said about 100 documents contained confidential designs and part of the information in the remaining 146 documents were confidential, the Court rejected the claim because ‘it was very difficult to know precisely what information it is confidential’.

Further, the information need to be confidential in nature. If the information is either trivial, immoral, vague or already available in public domain, it will not be treated as confidential information.

Note: This article also published at LinkedIn.