Tweet

Non-Disclosure Agreement Warning!

Written by: JW Dicks

Article Overview: Non-Disclosure Agreements have become almost ubiquitous in the business world today. Are they necessary? Should you sign them? This article outlines some common concerns and strategies for using NDAs.

Non-Disclosure Agreement Warning!

It seems as though it has gotten to be that every time you go to a business meeting someone wants to whip out a Non Disclosure Agreement (NDA), and ask you to sign it. Don’t!

Having said that we know that from a practical standpoint there will be times where you will sign an NDA in order to move forward in a potential joint venture or other type of transaction. If you find yourself faced with that uncomfortable position, at least take the time to read the NDA you are presented before you sign it, because not all NDA’s are alike. Just for fun I started collecting and comparing different ones people gave out and was amazed by some of the differences.

One of the most far-reaching NDA’s is the one that contains a non- compete clause. Amazingly, this is getting more frequent because people are using other people’s forms that contain the non-compete language and once it gets into circulation it is harder to stop. At a minimum, you want to strike the Non-compete part of the NDA. It is one thing to agree not to disclose information you are getting that you have no prior knowledge about, but it is quite another for the other party to try and stop you from competing with them if negotiations don’t run well. In most cases you wouldn’t sign a non- compete without very careful negotiations on language about territory and duration…yet in a weak moment you might sign away your ability to compete just because someone hands you what looks like a “standard” NDA. In fact, make it a point that anytime someone hands you a document and says, “its ok its just a standard NDA” (or another type of contract for that matter) make it a point to put yourself on red alert. The issue is always “whose standard” (likely theirs) and that’s the problem.

Before you sign anyone’s NDA, make sure you review it carefully to make sure the only thing you are agreeing to is not to “reveal the information you are about to receive to others if you did not already have that information or that it was otherwise not available from another source”. This normally is said in about three paragraphs instead of one short sentence, but that is the essence of all someone should need from you. If you give the opposing party more rights than that, you could have a problem if you decide to do a separate business deal with someone else in a business that is even similar to the company that you signed the NDA with.

Another option you can exercise when someone offers you an NDA is to just take the position that you don’t sign NDAs. This is easier to do if you are the have the upper hand in a negotiation and you have lots of people wanting to work with you, but several of our clients have taken this position and don’t budge. You might miss seeing some new and exciting stuff if you take this position, or the other side may just decide not to force you to sign after all. Naturally, you could always change your mind if they tell you they won’t move forward without it. Some people think it is weak to change your mind when you are negotiating but we choose to believe it is just part of the process and you haven’t given up anything at all.

Naturally, we would be remiss as lawyers if we didn’t say, “But On the other hand” (as lawyers always do), and say to you that when the tables are reversed and you are the one handing out the NDA for others to sign, make it as strong as you can. In some cases you may want to have non-compete language and even a non-disparagement provision so people don’t bad mouth you. Getting beat up on the internet by people saying bad and untrue things about you is a problem these days because some of the comments last forever on the web and hurt you with potential new business. You can start with NDAs, but be sure to keep the non-disparagement provision in mind whenever you are drafting any agreement,.

What we have tried to do in this article is raise the issues and concerns about NDAs. Spend a few moments thinking about them and plan mentally what you are going to do the next time someone hands you one and asks you to sign it. Planning ahead mentally will keep you from being caught off guard. Now that you know what to expect you can react according to your own advantage and not someone else’s.

Related Articles
  Can You Keep a Secret? Tips to Protect Confidential Company Info
  Be Clear and Concise When You Hire
  Non-Disclosure and Confidentiality
  Cohabitation Agreements
  How To Terminate a Lease Agreement

Article Tags: branding agency, branding and marketing, branding companies, branding consultants, branding strategies, business development, business growth, business marketing, celebrity agent, celebrity lawyer, expert agent, personal branding, personal branding expert



Related Forum Posts
Franchising & Licensing Can Be The Same Thing - FTC Rule 436 defines franchising as anyone offering an Agreement that contains these 3 things: 1. Licensing a "Mark" - which can be a trade name, service mark, commercial symbol, slogan, etc. 2. In the body of the Agreement, there contains, significant controls and assistance. 3. The licensee is paying the licensor in excess of $500 within the first six months of the actual offering of the business. Licensing and Franchising can mean the same thing today. If you do not decide to franchise and comply with FTC Rule 436, you may be in violation of Business Opportunity Laws that exist in 24 individual States.
Non-Disclosure Agreement - How should I decide who to get to sign my Non-Disclosure Agreement or not? Is it worth having? I'm worried that people won't want to help if I make them sign the NDA.
Not much idea about ITE today - Thanks, I don't know why but that's the kind of response I expected - I replied to their TV ad I saw a few weeks ago and received their info pack. I took the "Disclosure Agreement' to a patent attorney and he quickly pointed out that there was no space for their signature anywhere on the form, so I quizzed them about it and I was told that they would send me a signed DA, but I'm still waiting... I think I'll give them a miss now, in fact I've just this morning come across the Trevor Bayliss Brands site myself and sent off their DA so I'll wait and see what happens.
Re: Moderators on vacation - [quote="ideasuniversity":3chelzm3]Some one is advertising nikeeeesshoes consistently here. I did warn but, he or she keeps going on and on.[/quote:3chelzm3] Yep, I have reported those posts many times. Warning spammers does nothing because they don't read them or care anyway. You must delete the posts if you can, report them if you can't, and those with the power need to ban the member doing the spamming.
Re: Moderators on vacation - [quote="Trent Brownrigg":2b3c4rnk][quote="ideasuniversity":2b3c4rnk]Some one is advertising nikeeeesshoes consistently here. I did warn but, he or she keeps going on and on.[/quote:2b3c4rnk] Yep, I have reported those posts many times. Warning spammers does nothing because they don't read them or care anyway. You must delete the posts if you can, report them if you can't, and those with the power need to ban the member doing the spamming.[/quote:2b3c4rnk] Good job, Trent. Keep up the fight! Not dealing with spammers in the appropriate manner by banning them is not in the best interest of the forum. Those with the power to do so need to take action to protect the integrity of what this forum is all about.


Share this article with your friends. Fund someone's dream.

Leave a comment below or share on the left and you'll help support entrepreneurs in Africa through our partnership with Kiva. Over $50,000 raised and counting - Please keep sharing! Learn more.

Tweet

Newsletter

Get advice & tips from famous business
owners, new articles by entrepreneur
experts, my latest website updates, &
special sneak peaks at what's to come!

Name:
Email:

Popular Articles

Top 5 Tips for Better Online Ads

What is the bottom line to you?

Earn More Money - Easy Home Business Ideas

Suggestions

Email us your ideas on how to make our
website more valuable! Thank you Sharon
from Toronto Salsa Lessons / Classes for
your suggestions to make the newsletter
look like the website and profile younger
entrepreneurs like Jennifer Lopez.