How to make sure your NDA covers all your needs?
NDA efficiency is not obvious. Here's how to make sure your NDA is efficient. Common sense (which is often what business law is about), will tell you that the best way to keep a secret is to avoid sharing it.
The minute you start sharing a secret, it no longer becomes one.
An NDA is all and well and good, and actually can help you inform the persons you are disclosing your information to about what they risk if they start disseminating your information to other persons.
But the truth is that once the information is leaked, the harm is done, and nothing will really make up for the troubles you’ll endure, the loss of time and money, even if you do end up going after the person who let the cat out of the bag.
Remember that an NDA is just a contract - not a magic tracker that will let you know when the other side breaches the confidentiality obligations (lets the cat out of the bag).
Because it is a contract and you might have to have it enforced at some point, you want to make sure you can actually go after the person who is using your confidential information.
The way to do that is to anticipate upon signing the agreement that in order to use it, you’ll need to be able to send an official letter to that person.
If you are dealing with an individual located in the country in which you are doing business, here’s what you need to include and attach to the NDA:
· Individual first, middle and last names/company name
· Place of residence
· Social security number (if located in common law countries such as the US)
· Fiscal form required for the hiring of freelance by the laws of the country you are doing business in (in the US the form would be a W9).
If you are dealing with an individual located outside your country, ask for a copy of the passport to be attached to the agreement. Signing a document that merely states your name and country of residence when your name is a very common one, does not really carry any value. It has less effect than signing a document to which you attached your passport information thereby providing a way for the other signatory party to find you.
If you are planning on exchanging information about your business with a company, here’s what you need to include and attach to the NDA:
· Company name
· Form of incorporation (ex: Gmbh in Germany, Ltd in the UK or in India, Inc. or LLC in the US)
· Company address (where it is incorporated and where it is doing business. Sometimes these differ. The more addresses you have, the better chances you’ll have to notify that company in case of an infringement).
· The name of the representative who will be signing the NDA and the quality he in which he is acting (authorized representative of the company) together with
· A copy of the certificate of incorporation or equivalent
Finally, because some civil law countries such as France and Germany require for each page of an agreement and its attachments to be initialed, if you are hiring contractors that are not located in your common law country, ask for the signatory party to initial each page.
All these precautions may sound like overboard legalese. And in most cases that’s what they’ll turn out to be. But when things do go wrong, they are the only way you may get a chance to act upon an infringement of the agreement.
They also show to the persons you are disclosing the information to that you are serious about the obligations attached to it. This is how to make sure of your NDA's efficiency.