WHEN TO USE AN NDA
So first, lets start with....
I don't care how small your business is, I don't care if you are the entire department, anytime money is going to exchange hands get something in writing. This can be an email, text message, invoice or signed contract.
Get something in writing!
WHY?
1. To set expectations for business and results.
2. A formal document is needed for both parties to agree on a business exchange. Keeps everyone honest and saves you from being liable if a lawsuit or arbitration should occur.
3. To hold yourself accountable for products or services rendered.
WHAT MAKES A CONTRACT LEGALLY BINDING?
1. OFFER- One of the parties made a promise to do or refrain from doing some specified action in the future. 2. CONSIDERATION - Something of value was promised in exchange for the specified action or non action. This can take the form of a significant expenditure of money or effort, a promise to perform some service, an agreement not to do something, or reliance on the promise. Consideration is the value that induces the parties to enter into the contract.
The existence of consideration distinguishes a contract from a gift. A gift is a voluntary and gratuitous transfer of property from one person to another, without something of value promised in return. Failure to follow through on a promise to make a gift is not enforceable as a breach of contract because there is no consideration for the promise. 3. ACCEPTANCE - The offer was accepted unambiguously. Acceptance may be expressed through words, deeds or performance as called for in the contract. Generally, the acceptance must mirror the terms of the offer. If not, the acceptance is viewed as a rejection and counteroffer.
WHEN TO USE AN NDA
It is a contract through which the parties agree not to disclose information covered by the agreement
(BE SPECIFIC).
Non-disclosure agreements are an important legal framework used to protect sensitive and confidential information from being made available by the recipient of that information. It is important to know that your business idea alone may not warrant an NDA. Networking, and using consultants to flush out ideas are a healthy part of building your business ideas.
An NDA creates a confidential relationship between the parties, typically to protect any type of confidential and proprietary information or trade secrets. Such as non-public business information. An NDA should be used when specific information is revealed. I have listed examples below.
- Patents/IDEAS
- Technology
- Recipe's
- Designs
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