Payton & Associates, LLC
Commercial Litigation Attorneys
Miami, Florida
786-574-4943

The importance of an NDA in a confidentiality agreement dispute


Miami businesses will sometimes need to share certain information that could be considered delicate in order to move their business forward. This can have to do with designs, intellectual property and more. It is in these circumstances that it is necessary to have a non-disclosure agreement, also known as an "NDA." With an NDA, the business will protect itself when sharing this information when another party is using it. Theft of this information can result in business disputes, a breach of contract and a confidentiality agreement dispute. Protection is the order of the day with these cases and knowing when to have an NDA can avoid these problems, or be useful if it is violated and litigation is necessary. It is also important after the fact when the product might have been used illegally by the other entity.

When a product or technological advance is being sold or licensed, there should be an NDA. The entity that is buying the product will obviously want to know what it is. To avoid the risk of this being stolen or used illegally by the purchaser, the NDA can be beneficial. Employees will need to have access to certain information to do their jobs. These can be direct employees or contractors. To prevent them from taking the information they have access to and profiting themselves, an NDA is useful.

When seeking capital or discussing some form of business arrangement with an investor or prospective partner, having to share information about the company and its products is unavoidable. Protecting the product is of paramount importance. This is especially true if it is a startup trying to raise money. Inexperience in these matters can lead to a mistake. Sharing information on the inner workings of a company can be dangerous if there is not an agreement in place to govern how it is used.

Finally, when there is a possible sale of the company, there will be a need to share the information of the products and technology that the company has created. The buyer should sign an NDA to stop that information from getting into the wrong hands. Naturally, the best way to avoid business disputes in these situations is to have an NDA. Even if there is an NDA, that does not mean the agreement will be adhered to. If there is any problem with information that is private being used illegally, getting the right information about high-end contract litigation can help.

Source: Entrepreneur, "5 Situations That Require a Non-Disclosure Agreement," Jonathan Long, Feb. 2, 2017

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