The Importance of Non-Disclosure / Confidentiality Agreements
There is much excitement that comes with negotiating a business transaction or joint venture with a prospective partner. It is important to remember, though, that whether your negotiations are successful or not, you need to protect your confidential information through the negotiating process.
Whether you are disclosing details about your clients, your products, your systems or even a new idea that you may have, it is important to ensure that before commencing negotiations, both parties sign a non-disclosure or confidentiality agreement.
Such an agreement will ensure that the confidential information disclosed during the negotiation process cannot be used independently by the other party at any stage for their own gain without the disclosing party’s consent.
Ideally the period for the non-disclosure should be indefinite, subject to common provisos such as “unless that information is already in the public domain or subsequently becomes public knowledge”.
What also often happens is that an agreement that is entered into between the parties after negotiations have concluded will supersede the provisions of the non-disclosure/ confidentiality agreement, so make sure that such an agreement carries through all the necessary protective elements of your confidentiality agreement.
Make sure that the confidential information is properly defined together with the reason for disclosure (ensuring that the information is only disclosed for the purpose for which it was given).
It must be clear that the defined information cannot be disclosed or used (other than as indicated) and steps must be taken (by the party receiving the information) to keep the information confidential.
The reality is that if you don’t enter into such an agreement, any information that is shared during negotiations is up for grabs (unless legally protected through other means, such as the registering of a trademark or patent), but you cannot protect an idea, so make sure that everything is reduced to writing.
Whether the proposed union is a long and happy one, or you don’t make it past the first date, make sure you look through the romantic cloud and protect your proprietary information!
Do you need a Non-Disclosure / Confidentiality Agreement?
If you are considering entering into a transaction or joint venture and want guidance on the use and application of Non–Disclosure / Confidentiality Agreements, get in touch with Vizibiliti Management Services today.
BY ALISON MAYTHAM
“There are many different factors that determine the success of your practice – but, as a busy healthcare professional focusing on the needs of your patients, you may not always have the time to focus on the many demanding, and often complex, facets of managing your business. Vizibiliti provides you with easy access to insightful, comprehensive practice and business management solutions and advice across all stages of your business journey – from establishing, growing or closing your practice.”