When Illinois residents are setting up their businesses or about to enter into a commercial transaction with a businessperson, they are most likely going to be disclosing confidential information to the other party. In such situations, creators and businesspersons should take steps to ensure their ideas and information remain confidential. One way to achieve this is by entering into a confidentiality agreement, known as a nondisclosure agreement.
An NDA is a routine agreement that is meant to protect the owner of the business or the new idea. It is also used when companies are contemplating a merger or form of commercial transaction which should be shielded from public knowledge. Employees may also have to sign NDAs if they are coming across sensitive information that would harm the company if it got out.
Though there is some boilerplate language that all NDAs have, it is important to customize one to include the items being protected and exceptions to the protection. Additionally, it should include the length of the agreement, when disclosure is permitted and the obligations of the people receiving the information. Parties have to agree which state’s laws will apply to the agreement in question. Since the NDA is a legal contract, violating it could result in legal fines and other repercussions.
There is a lot of legal value attached to an NDA, which is why it might be the best option for those who need to share confidential information but need to ensure its security. An experienced business law and commercial litigation attorney may be able to help people craft one based on their needs.