Non Disclosure Agreement & Its Benefits
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A Non Disclosure Agreement is a legal contract where the signatories promise to not reveal confidential information to a third party. The participants of the agreement aimed at serving specific purposes and agreeing to exchange secret information. The violating party can be held accountable for financial damages. The main objective of NDA is to protect employees from sharing confidential information and also help in protecting trade secrets when information is shared during the regular course of business. The NDA helps in having legal recourse that the contract can be broken through the unlawful dissemination of confidential information and consequences for breaching trust. An NDA gives safety to confidential information and consequences for breaching the agreement, misunderstandings, etc. An NDA protects business information and has consequences for employees violating the NDA. A well-drafted and detailed NDA helps in guiding and handling trade secrets. The two businesses when discussing the possibility of partnering with each other then each company has to disclose information about the operations for informing the capabilities. In this agreement, both parties agree to not disclose information because each side receives sensitive information. The agreement applies to the new employees when they are accessible to sensitive information. In such an agreement, an employee signs the agreement for preventing sharing of confidential information. The multilateral agreement is made in case of more than two parties for protection in case of disclosure of information. There is software acting as layers of protection from using confidential information. Individuals are signing the opposite of a Non-Disclosure Agreement like in the case of a Doctor. He can ask a patient to sign an agreement for the patient's medical details to be shared with an insurer. The name of the parties and the number of parties which show unilateral, bilateral, or multilateral. The Indian Contract Act of 1872 is the governing act for the contract to agree to not disclose confidential information. This agreement has provided many benefits to the company at a low cost and clarity of information that is shared. Benefits of Non-Disclosure Agreement are as follows:
Helps in Protecting Secrets
Helps in Enforce Consequences
Preserving Business Relationship
Establishment of Employee Expectations
Types of Non-Disclosure Agreements are:
1. Mutual Agreement
2. Non-Mutual Agreement
3. Disclosure Agreement
The Non-Disclosure Agreement consists of the following clauses:
The importance of entering into a Non-Disclosure Agreement is:
Conclusion