NDA Confidentiality Agreement: First line of defence for the protection of commercial assets

You often need to share some core information that is not yet publicly available during commercial negotiations, project outsourcing or job recruitment. NDA (non-Disclosure Agreement, Confidentiality Agreement) The most important legal tool for ensuring that such information is not disclosed or misused.

1. Why do you need to sign NDA?

Protection of core technologies: Prevent the clandestine flow of technology such as software source codes, algorithms, production processes to competitors.
Ensuring the security of negotiations: (c) At the stage of financing or M&A discussions, prevent the leakage of transaction information leading to stock price volatility or competitive disruption.
Legal evidence: If the leak occurred, the NDA signed was the direct basis for prosecuting the defaulting party and claiming damages.

2. One-way vs two-way: which is the choice?

According to the direction of the flow of information, NDA is divided into two types:

Undirected confidential: Only one party (the disclosure party) provides sensitive information, while the other party (the receiving party) undertakes to keep it confidential. It is common for companies to recruit new staff or to look for outsourcing development.
Two-way secret (Mutual): Both sides share sensitive information. It is common for two companies to explore in-depth strategic cooperation or joint ventures.

3. How long should the period of confidentiality be set?

The duration of confidentiality is not as long as possible. Excessive duration (e.g. 10) Over the years) may be regarded as “unreasonable restrictions” in some jurisdictions, leading to the lapse of the provision. In general, 3 to 5 years The most common period of time for commercial cooperation. For patented technologies involving very high value, they could be set up as “permanent validity”.

4. 3 common pits at NDA writing

Too narrow: If the definition of confidential information only contained “written documents”, then the information exchanged orally might not be protected.
Lack of remedies: The agreement should specify that, once a breach of confidentiality has been made, the disclosure party has the right to apply for a “prohibit” to immediately cease the breach, and not just to pursue a claim for compensation after the event.
Ignore the “object of disclosure”: The recipient must be restricted to the use of information for a specific purpose (e.g. “assessment cooperation”) to prevent the other party from using your information to develop competition.

Legal declaration: The document generated by this tool is only used as a generic template and does not represent KiloCell of cells (c) Providing formal legal correspondence or legal advice. Due to minor differences in laws, it is recommended that, in the case of major commercial contracts, a final review by a practising lawyer be conducted prior to signing.